Hong Kong stocks tumble as China factory report revives policy tightening concerns, tech stocks end March mayhem

Name: China’s 2021 National People’s Congress opens with Hong Kong’s electoral system on the agenda
Uploaded: 2021-03-31T02:56:23.000Z
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Description: China’s 2021 National People’s Congress opens with Hong Kong’s electoral system on the agenda

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This aerial photo shows shipping containers for export stacked at a port in Lianyungang, in Chinas eastern Jiangsu province on March 7, 2021. Photo: AFP

Zhang Shidong

Published: 10:56am, 31 Mar 2021Updated: 5:01pm, 31 Mar 2021

Hong Kong stocks fell in March, its first loss in six months, after an official report showed China’s manufacturing expanded for more than a year, bolstering the case for dialling back policy support in the Asian nation. Tech stocks completed their worst month in a year.

The Hang Seng Index halted a three-day gain with a 0.7 per cent setback to 28,378.35 at the close of trading on Wednesday, reversing an intraday gain of as much as 0.9 per cent. Pork processor WH Group and BOC Hong Kong Holdings led the index losers, each falling by at least 4.6 per cent.

The CSI 300 Index of biggest stocks in Shanghai and Shenzhen slipped 0.9 per cent. The nation’s top liquor distiller Kweichow Moutai, which carries the biggest weighting in the benchmark, dropped 2.3 per cent after reporting a 13 per cent gain in 2020 earnings. The result was in line with a forecast of 15 per cent gain issued by the company in January.

Kweichow Moutai expects to boost its revenue by 10.5 per cent this year, it said in the annual report, versus 11 per cent recorded a year earlier.

China’s Purchasing Managers’ Index (PMI) rose to 51.9 from 50.6 in February, the statistics office said on Wednesday, exceeding the median estimate of 51.2 in a Bloomberg survey of economists. The gauge has remained in the expansionary territory of more than 50 since March last year, when China put the pandemic under control.

“Onshore liquidity may tighten as economic data continues to improve,” said Stephen Innes, a strategist at AxiCorp. “March PMI will be the first leading indicator.”

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China’s 2021 National People’s Congress opens with Hong Kong’s electoral system on the agenda

Elsewhere in the region, Japan’s benchmark stock index declined on Wednesday, as financial stocks reeled from losses tied to Archegos Capital Management. Mitsubishi UFJ Financial Group followed Nomura in flagging losses on the forced sales of stocks at the troubled New York fund.