Hong Kong stocks make a dismal start to 2024 after China PMI report hints at sustained economic weakness

Hang Seng Index fell 14 per cent last year and in the four consecutive years of losses, it has declined 40 per cent in aggregate

China’s manufacturing activity shrivelled for the third straight month with PMI data showing contraction deepened

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Hong Kong Exchange Square in Central. Photo: Xiaomei Chen

Published: 10:40am, 2 Jan 2024Updated: 4:40pm, 2 Jan 2024

Hong Kong stocks dropped on the first trading day in 2024 after reports showed China’s manufacturing activity contracted for a third straight month and home sales of the nation’s top developers slumped.

The Hang Seng Index fell 1.5 per cent to 16,788.35 at the close. The Hang Seng Tech Index shed 1.3 per cent and the Shanghai Composite Index retreated 0.4 per cent.

Alibaba Group dropped 1.2 per cent to HK$74.70 after the e-commerce giant was ordered to pay 1 billion yuan (US$140.3 million) to rival JD.com by a Beijing court after losing an antitrust lawsuit. JD.com fell 2.4 per cent to HK$109.80.

Longfor Group Holdings sank 7 per cent to HK$11.62 and China Resources Land slid 5.4 per cent to HK$26.50 after sales at the nation’s biggest 100 developers tumbled 35 per cent from a year earlier last month. Chinese electric-vehicle maker Li Auto slumped 5.2 per cent to HK$139.40 and Chinese sportswear maker Li Ning fell 5.8 per cent to HK$19.68.

The purchasing managers’ index (PMI) of the manufacturing industry dropped to 49 from 49.4 in November, staying below the 50 reading that divides expansion and contraction for a third straight month, the National Bureau of Statistics said over the weekend.

“The persistent weakness may exert pressure on the Hong Kong and mainland China equity markets when investors return from the long weekend,” said Redmond Wong, a strategist at Saxo Markets in Hong Kong.