Hong Kong stocks retreat from 3-week high as traders struggle for catalysts to sustain China reopening bets
- Rising coronavirus infections undermine market optimism about an imminent end to China’s zero-Covid policy
- Stocks in Hong Kong have gained US$430 billion in market capitalisation from this month’s rally
The Hang Seng Index slipped 0.2 per cent to 16,557.31 at the close, snapping a powerful 13 per cent surge this month. The Hang Seng Tech Index dropped 1.6 per cent and the Shanghai Composite Index fell by 0.4 per cent.
“While Hong Kong stocks may have bottomed out, volatility will increase going forward and there’s still uncertainty about the strength of this rebound,” said Dai Qing, an analyst at Guotai Junan Securities. “The market may overestimate the pace of China’s easing of Covid restrictions.”
Today’s retreat followed a government report showing 7,323 new Covid-19 infections in mainland China, the most since April 30, challenging calls for an end to Beijing’s zero-Covid policy. China’s health authority said on Saturday it would “unswervingly” continue to enforce the stringent curbs.
Medical device maker Lepu Scientech Medical Technology was unchanged at HK$29.15 on the first day of trading in Hong Kong. Fujian South Highway Machinery rose by the 44 per cent daily limit to 34.20 yuan in its Shanghai debut.
Other major Asian markets all rose before a US government report later this week that is expected to show inflation slowed in October. Japan’s Nikkei 225 gained 1.3 per cent and South Korea’s Kospi added 1.2 per cent, while Australia’s S&P/ASX 200 climbed 0.4 per cent.