Hong Kong stocks post third quarterly loss as Chinese manufacturing contracts, US digs in heels on delistings deal
- China’s manufacturing purchasing managers’ index dropped to 49.5 in March, the first time it has dipped below 50 in five months
- US watchdogs quelled speculation about a deal to retain the listing status of about 200 Chinese companies trading on American bourses
The Hang Seng Tech Index slid 1.4 per cent, while China’s Shanghai Composite Index slipped by 0.4 per cent.
Clothes maker Shenzhou International Group Holdings, Wuxi Biologics and CSPC Pharmaceutical Group led losses on the Hang Seng Index, retreating at least 4.9 per cent each.
China, which is sticking to a zero-Covid strategy, is grappling with the most severe resurgence of the pandemic since its first outbreak at the end of 2019. Shanghai, its biggest commercial city, is now in a two-phase lockdown, while the technology hub of Shenzhen has just brought the epidemic under control after a week-long cooping-up.
Swiss private bank UBP said this week that China will soon resume cutting interest rates to sustain growth. Reducing banks’ reserve requirement ratio will also be an option in the second quarter, it said.
“The recent resurgence in the pandemic will undoubtedly put corporate earnings under pressure,” said Essence Securities in a report on Thursday. “The market will now focus on how specific policies will be put in place after the government talked up the market.”
Sentiment was also hurt when the Securities and Exchange Commission (SEC) added more Chinese companies trading in the US – including Baidu and online brokerage Futu Holdings – to a list of those allegedly not complying with the law, a move that will lead to possible delisting.
Among the biggest decliners, Shenzhou International slid 7.3 per cent to HK$104.80, Wuxi Biologics lost 6 per cent to HK$65.05 and CSPC Pharm dropped 4.9 per cent to HK$9.05.
Vaccine maker Jiangsu Recbio Technology rose 1.8 per cent HK$25.25 on its first day of trading in Hong Kong. Redco Healthy Living, a property management firm, surged 26 per cent to HK$5.18 on its debut, and household appliance maker Ferretti slipped 0.1 per cent to HK$22.85.