Hong Kong stocks suffer 8.5% slide in August as Chinese manufacturing slump, property debt woes rattle investors
- China’s PMI manufacturing index remained below the 50-point threshold for a fifth month in August, the statistics bureau reported on Thursday
- The Hang Seng Index has lost 8.5 per cent in August, the first monthly setback since May and the most since February, following an exodus of foreign funds
The Hang Seng Index fell 0.6 per cent to 18,382.06 at the close of Thursday trading, retreating from near a two-week high. The index slumped 8.5 per cent in August, the most since a 9.4 per cent sell-off in Feburary. The Tech Index dropped 0.4 per cent and the Shanghai Composite Index retreated 0.6 per cent.
Limiting losses, China Mengniu Dairy rallied 5.6 per cent to HK$26.40 on the back of fatter operating margins in the first half. Baidu jumped 2.1 per cent to HK$139.40 after opening its ChatGPT-like ErnieBot for public use.
This month’s setback kept the city’s benchmark stock index at 7.1 per cent loss since the start of the year, making it the worst performer among major world indices and wiping out US$268 billion in market value from its 80 blue-chip members.
China’s official PMI manufacturing index rose to 49.7 in August from 49.3 in July, the statistics bureau said on Thursday, coming above market expectations of 49.4. Still, it marked a fifth straight month of contraction as the reading stayed below the 50-point threshold.
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“While the data is better than expected, it also highlights the issue of insufficient demand,” said Bruce Pang, chief economist at Jones Lang LaSalle in Hong Kong. “Going forward, whether there will be incremental policy support and implementation will be closely monitored.”
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Some 72 of the Hang Seng Index’s 80 members have released their latest results so far, registering an average 1.3 per cent decline in earnings, according to Bloomberg data. The index members posted an average 5.5 per cent increase in 2022.
Other major Asian markets were mixed in Thursday trading. Japan’s Nikkei 225 climbed 0.9 per cent, while South Korea’s Kospi retreated 0.2 per cent and Australia’s S&P/ASX 200 added 0.1 per cent.