China Mobile jumps as Hong Kong stocks struggle amid Beijing’s conservative growth targets
- China’s growth target, budget deficit and financing for 2023 were generally below market expectations
- Stocks have struggled to sustain a rally built on Beijing’s zero-Covid pivot after slipping into a technical correction last month
The Hang Seng Index climbed 0.2 per cent to 20,603.19 at the close of Monday trading, erasing a decline of as much as 0.8 per cent. The Tech Index dropped 0.8 per cent and the Shanghai Composite Index retreated 0.2 per cent at the close.
China Mobile jumped 3.2 per cent to HK$64 while China Unicom added 1.8 per cent to HK$6.38, extending a rally this year following Beijing’s ambitious digitalisation plan. Hong Kong Exchanges and Clearing appreciated 0.6 per cent to HK$339.80. Limiting gains, developer Country Garden lost 3.8 per cent to HK$2.54, and peer Longfor Group retreated 0.2 per cent to HK$24.85.
“Investor sentiment has yet to pick up significantly,” Zhu Chaoping, Shanghai-based market strategist at JPMorgan Asset Management, said in a note to clients. “The growth outlook for most sectors remains strong, and there is upside potential when policy stimulus escalates.”
Outgoing Premier Li Keqiang set a target of “around 5 per cent” for China’s economic growth this year in the government work report to the National People’s Congress on Sunday, leaving it to his likely successor Li Qiang to provide more incentives some time next week. China’s gross domestic product increased 3 per cent in 2022.
The target was conservative, economists at Goldman Sachs said in a report on Monday. “Overall, government-led infrastructure building is unlikely to be the key driver of growth this year” given the smaller than predicted budget deficit and local government financing budgets, they added.
Alibaba Group Holding slipped 0.9 per cent to HK$87.25 while sportswear makers Li Ning and Anta Sports Products declined 1 per cent and 3.7 per cent respectively on policy disappointment.
Local stocks last week snapped a four-week losing streak after government and private reports showed manufacturing and services industries in China accelerated in February. The Hang Seng Index had earlier slipped into a technical correction of more than 10 per cent from its January 27 peak.
Further boosting sentiment, JD.com advanced 1.4 per cent to HK$187.30. The e-commerce platform operator will report its 2022 earnings on Thursday, with net income likely to rise 49 per cent from a year earlier, according to analyst estimates compiled by Bloomberg.
Elsewhere, Guangdong Lvtong New Energy Electric Vehicle Technology rose 1.4 per cent to 132.90 yuan on its first day of trading in Shenzhen.
Other major Asian markets all rose, tracking Friday’s bullish close on Wall Street. Japan’s Nikkei 225 climbed 1.1 per cent, while South Korea’s Kospi rose 1.3 per cent and Australia’s S&P/ASX 200 added 0.6 per cent.