Hong Kong stocks slide on China policy struggle as Goldman cuts GDP forecasts again while online spending looks gloomy
- Goldman cuts China GDP forecasts for 2023 and 2024, saying policy response to slowdown will be restrained
- Alibaba Group, JD.com led losers amid speculation about weaker-than-expected June 18 annual mid-year online shopping gala
The Hang Seng Index lost 0.6 per cent to 19,912.89 at the close of Monday trading, after gaining a cumulative 7 per cent over the past three weeks. The Tech Index dropped 1.3 per cent and the Shanghai Composite Index declined 0.5 per cent.
Alibaba Group slid 2.1 per cent to HK$89.70, while JD.com lost 1.9 per cent to HK$154.40 and Tencent dropped 1.6 per cent to HK$357.20. Developer Country Garden crashed 5.3 per cent to HK$1.77, while peer Longfor Group weakened 0.2 per cent to HK$20.45. Apparel maker Anta Sports slumped 4 per cent to HK$87.90, while biotech firm WuXi Biologics lost 1.6 per cent to HK$46.70.
“Investors have become impatient and demand more than just rate cuts,” said Redmond Wong, strategist at Saxo Capital Markets Hong Kong. China’s central bank could cut loan prime rates this week and deploy other tools, such as liquidity injection and bond financing quotas, he added.
Goldman Sachs said persistent growth headwinds are likely to confront China’s economy, after cutting its 2023 growth forecast to 5.4 per cent from 6 per cent on Sunday. Policy easing “will not be as large and forceful” as in the past cycles, it cautioned.
“I am worried that poor consumer confidence and deflationary pressure may intertwine and form a formidable downward spiral,” Qi Wang, CEO of MegaTrust Investment, said in a note to client on Monday.