Hong Kong stocks end 6-day slide on US rate outlook while BYD retreats amid EU probe on China EV subsidies

Slowing US core inflation bolstered bets the Federal Reserve will pause on rate hike later this month

China condemned EU probe on EV subsidies as protectionism, given similar incentives by its member countries

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An electronic board shows Shanghai and Shenzhen stock indexes in Shanghai in October 2022. Photo: Reuters

Published: 10:31am, 14 Sep 2023Updated: 5:03pm, 14 Sep 2023

Hong Kong stocks rose, halting a six-day decline, as slowing US core inflation reinforced bets the Federal Reserve will pause its policy tightening later this month. Other reports this week may add to signs of China’s economic recovery.

The Hang Seng Index added 0.2 per cent to 18,047.92 at the close. The gauge dropped 4.4 per cent over the past six days. The Tech Index advanced 0.4 per cent and the Shanghai Composite Index gained 0.1 per cent.

PetroChina climbed 5.8 per cent to HK$5.81 and CNOOC rallied 5 per cent to HK$13.80 after crude oil futures touched a 10-month high. Alibaba Group added 0.4 per cent to HK$85.90 and rival JD.com increased 0.2 per cent to HK$124, rebounding from a record low.

“There’s a big chance that interest rates will not be increased in September and the future policy is data-dependent,” said Shen Fanchao, an analyst at Zheshang International in Hong Kong. “We are confident about stabilisation in fundamentals going forward after some of the key economic data has picked up.”

Headline US inflation quickened 3.7 per cent in August, the government said overnight, while core prices excluding food and energy costs rose 4.3 per cent from a year earlier, the smallest gain in almost two years.

China’s stimulus measures may have helped stabilise growth last month, according to economists forecasts before reports on Friday. Industrial production probably grew 3.9 per cent from a year ago, versus a 3.7 per cent increase in July. Retail sales likely rose 3 per cent versus 2.5 per cent.

BYD led a slide in electric-vehicle makers on concerns about export outlook, after the European Union started a probe into subsidies for Chinese EV makers, saying their car prices are artificially low. BYD tumbled 1.2 per cent to HK$244.80. Nio lost 0.9 per cent to HK$79.70.