Shanghai shares eke out small gain while Hong Kong stocks slip as recession fears resurface
- Hang Seng Index losses are 8.3 per cent so far this month amid US-China trade, tech flare-up
- Insurers help boost Shanghai benchmark after they get tax break
Hong Kong stocks ended lower Wednesday, while mainland benchmarks were mixed, as fears of a global recession resurfaced.
The Hang Seng ended down 0.57 per cent, or 155.1 points, at 27,235.71, after the yield of the benchmark three-month US Treasury once again rose above that of the 10-year. The so-called yield curve inversion is seen as warning signal of a looming recession.
China benchmarks were mixed, with the CSI 300 ending down 0.23 per cent or 8.35 points at 3,663.91, while the Shanghai Composite Index eked out a small gain, closing up 0.17 per cent or 4.79 points, at 2914.7, thanks to China insurers’ gains.
Thus far this month the Hang Seng Index has dropped 8.3 per cent, a trend which if continued in the next two days of May would put index in its first monthly loss this year.
“The only direction for the blue chip index is that it is finding the momentum to rebound, but is lacking (one) because the US-China trade war continues to cause concerns over the global economic outlook, as US treasury yields continue to go down,” said Louis Wong Wai-kit, a director at Philip Capital. Bond yields, which move inversely to price, drop as investors’ capital goes into the safety of government bonds.