Hong Kong stocks waver as traders reassess impact of China’s stimulus measures to spur growth

Hang Seng Index drops less than 0.1 per cent in choppy trading after changing direction more than 10 times
Hua Hong Semiconductor, China’s second-biggest chip maker, closes 2 per cent higher after rising by as much as 15 per cent on debut in Shanghai

Hong Kong stock market

Zhang Shidongin Shanghai

Published: 10:23am, 7 Aug 2023

Why you can trust SCMP

Hong Kong stocks fluctuated between gains and losses to finish the day little changed as investors as weighed the impact of the growth-stabilising measures on China’s economy.

The Hang Seng Index dropped less than 0.1 per cent to 19,537.92 at the close, after changing direction more than 10 times. The Hang Seng Tech Index rose 0.1 per cent while the Shanghai Composite Index retreated 0.6 per cent.

Cyclical stocks including aluminium maker China Shenhua Energy and PetroChina advanced, while Hansoh Pharmaceutical Group and other drug makers dropped on concern about a widening anti-corruption drive targeting the nation’s healthcare industry.

Local stocks remained weak after a 0.6 per cent drop last week as investors cashed out following a rally spurred by a dovish tone by the government to revive growth. Concerns have returned to dog investors that the current piecemeal stimulus measures will fail to stem a slowdown in growth and the likely policies may fall short of expectations. A joint briefing by government agencies, including the central bank and the finance ministry on Friday, failed to deliver any meaningful policies, repeating what policymakers had already pledged to spur growth.

“Further upside in the market requires an improvement in expectations and easing of uncertainty, and these require more powerful growth measures and reforms,” said Fang Yi, an analyst at Guotai Junan Securities. “Some investors are still reluctant to enter the market as they are averse to uncertainty prevailing in the market.”

Investors will be closely monitoring data to gauge the strength of China’s economy, with figures on foreign trade, inflation and credit supply due in the coming week.

Coal producer Shenhua gained 1.8 per cent to HK$22.60 and PetroChina also advanced by that much to HK$5.64. CNOOC added 2.6 per cent to HK$12.60. Hotpot restaurant operator Haidilao rallied 4.9 per cent to HK$22.55.

Meituan gained 0.5 per cent to HK$144.70 and Alibaba Group Holding also gained 0.5 per cent to HK$95.60 before its earnings report on Thursday.

Limiting the gains, Hansoh Pharmaceutical shed 10 per cent to HK$10.24, making it the worst performer on the Hang Seng Index. Sino Pharmaceutical dropped 5.6 per cent to HK$3.19 and CSPC Pharmaceutical Group lost 4.2 per cent to HK$5.92.

The party secretary of a hospital in Tibet was placed under investigation for breach of discipline, according to a local anti-graft body, signalling a widening anti-corruption campaign against the industry. By the end of July, about 160 hospital chiefs and party secretaries had been placed under investigation across China this year, according to local media.

Country Garden Holdings tumbled 7.7 per cent to HK$1.32 and Country Garden Services plunged 7.3 per cent to HK$8.99 and Greentown China Holdings lost 5.1 per cent to HK$8.59 after saying contracted sales fell 32 per cent from a year earlier in July.

Hua Hong Semiconductor, China’s second-biggest chip maker, gained 2 per cent to 53.06 yuan on the first day of trading in Shanghai, representing a 148 per cent premium to its Hong Kong-traded stock. It had earlier risen by as much as 15 per cent per cent. It is China’s biggest initial public offering and the world’s second largest this year, raking in 21.2 billion yuan (US$2.95 billion).

Other major Asian markets were mixed after a Friday US jobs report stoked concerns about the resilience of the economy. Japan’s Nikkei 225 climbed 0.2 per cent, South Korea’s Kospi retreated 0.9 per cent and Australia’s S&P/ASX 200 lost 0.2 per cent.

Post