Hong Kong stocks hold at 2-week high before China factory, retail reports while traders bet on Fed to pause rate-hike spree
- A slowdown in industrial production and retail sales growth may add to concerns about China’s faltering economic recovery
- Fed fund futures indicate a 74 per cent chance the Federal Reserve will hold its rate at current range, pausing on its most aggressive tightening in 40 years
The Hang Seng Index gained less than 0.1 per cent to 19,404.31 at the close of Monday trading, after losing as much as 0.7 per cent. The benchmark climbed in the past two weeks to the highest since May 23. The Tech Index advanced 0.3 per cent, while the Shanghai Composite Index retreated 0.1 per cent.
Carmaker BYD added 1.8 per cent to HK$255.60 and Trip.com advanced 2.6 per cent to HK$292.20, while Budweiser gained 1.9 per cent to HK$21.45. Limiting the upside, developer Longfor Group declined 2 per cent to HK$18.76 while peer Country Garden lost 1.6 per cent to HK$1.68 and JD Health tumbled 3.1 per cent to HK$49.30.
Industrial production in China probably increased 3.5 per cent last month, according to Goldman Sachs, similar to market consensus and marking a slowdown from a 5.6 per cent gain in April. The report is due on June 15. Retail sales likely grew 14 per cent versus 18.4 per cent in April, the US bank forecasts.
“The question for investors is whether growing evidence that China’s economy is losing momentum will prompt greater policy stimulus,” analysts at BCA Research said in a report on June 12. Beijing’s focus “has shifted towards managing downside economic risks, rather than a robust economic expansion. Thus, they will be slow to announce further meaningful stimulus measures.”
China’s exports shrank in May, official data last week showed, trailing consensus forecasts. Imports were flattish, leading to a smaller trade surplus of US$65.8 billion versus US$90 billion in April.
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