Hong Kong stocks in worst start to the year since 2016 on China growth concerns and US rate outlook
- Hopes of an imminent rate cut in the US dashed by US employment data, which showed jobless claims were lower than expected in December and hiring increased
- ‘Hong Kong stocks are still under pressure fundamentally,’ ICBC analyst Vincent Ji says
The Hang Seng Index fell 0.7 per cent to 16,535.33 at the close, capping a 3 per cent decline in the curtailed four-day trading week. The decline was the steepest for the first week of trading since 2016, when the benchmark slumped 6.7 per cent. The Hang Seng Tech Index dropped 1.7 per cent, while the Shanghai Composite Index slipped 0.9 per cent.
Alibaba Group Holding slid 3.2 per cent to HK$71.65 and Tencent Holdings lost 2.2 per cent to HK$292.20. Chinese electric-vehicle maker Xpeng tumbled 4.1 per cent to HK$52.70 after HSBC Holdings cut its earnings estimates for this year and next by 35 per cent and 42 per cent, respectively, because of rising pricing pressure. China Resources Beer declined 4.5 per cent to HK$30.50 and personal computer maker Lenovo Group shed 3.9 per cent to HK$10.28.
The latest US jobs data poured cold water on imminent and aggressive cuts in interest rates, as jobless claims were lower than expected in December and companies increased hiring. Earlier, the minutes from the Federal Reserve indicated interest rate cuts would not be as fast as expected.
Meanwhile, an official report showed China’s manufacturing industry contracted for a third straight month in December and declines in home sales of the nation’s biggest developers deepened last month.