New | Stimulus bets rise in HK as China factory orders slow
Fall in China PMI raises hopes for government measures to shore up economy as casino and property stocks buck broader trend with gains
Twin data points on Monday left stock market investors struggling to reconcile whether a steep slowdown in factory activity in China would spur additional government stimulus to shore up the weakening economy – or if the worst was over.
Hong Kong’s benchmark Hang Seng Index ended the day virtually flat, slipping just 9.18 points or 0.03 per cent to end at 28,123.82, in volatile trading marked by swings of as much as 250 points.
The Shanghai Composite Index rose 0.87 per cent, or 38.81 points, to finish at 4,480.46.
New orders at mainland Chinese factories fell last month at their fastest pace in a year while production levels stagnated, the monthly HSBC-Markit China purchasing managers’ index showed. The index dropped to 48.9 from 49.6 in March. A level below 50 indicates contraction in activity.
Meanwhile, shares of Macau casino stocks rose after some investors took comfort from gaming revenue figures for last month that did not deteriorate from March, despite chalking up an 11th successive month of declines.
China analyst Fraser Howie said there was a division between mainland Chinese fundamentals and the market. “[Investors think] if you have a weak economy, that is a good thing as you have government stimulus,” he said.