Hong Kong stocks erase most of intervention-driven rally amid China’s economic woes as Year of the Rabbit ends in misery
- Euphoric rally driven by China’s midweek market intervention waned amid renewed concerns about China’s economic woes
- The Hang Seng Index ended with a 29 per cent loss in Year of the Rabbit, the worst on record during the zodiac years
The Hang Seng Index slipped 0.8 per cent to 15,746.59 at the close of trading on Friday. The three-day losing streak reduced this week’s gain to 1.2 per cent, and diminished most of the euphoric 4 per cent jump on February 6 following Beijing’s move to stem a loss of confidence. The Hang Seng Tech Index declined 1.3 per cent.
Developer Longfor Group slumped 6.7 per cent to HK$8.53 and peer China Resources Land lost 1.9 per cent to HK$23.50. Alibaba Group dropped 1.4 per cent to HK$69.30 and rival JD.com fell 2.1 per cent to HK$86.15. Meituan lost 1.3 per cent to HK$67.30 and Baidu weakened 1.7 per cent to HK$101.20.
Other industry leaders also retreated. AIA Group dropped 0.2 per cent to HK$62.80 and Ping An Insurance slumped 2.5 per cent to HK$32.95. EV maker BYD dropped 0.7 per cent to HK$182.90 and rival Li Auto weakened 1.9 per cent to HK$116.90.
Hong Kong’s stock market stopped trading at midday on Friday to usher in the Year of the Dragon, and will shut on February 12 and 13 for the Lunar New Year. China’s onshore exchanges are closed from Friday to the end of next week.
Hong Kong’s stock underperformance shows “it’s exposed to several other headwinds such as the US interest-rate policy and geopolitical risks, besides economic fundamentals and corporate earnings outlook,” money manager HSBC Jintrust Fund Management said in a report.
Short-selling in China slumps to 3-year low after curbs imposed to lift market
Stocks lost momentum as investors took advantage of Tuesday’s rally to sell. A government report this week showed declines in consumer and producer prices in mainland China extended into January, signalling weak demand at home and abroad. China’s economy needs more forceful stimulus, not just stock market intervention, some analysts said.
03:05
Lunar New Year rush under way in China with more travel overseas and to major domestic cities
The Hang Seng Index ended the Year of the Rabbit in misery. The benchmark lost 29 per cent in value since the lunar year began on January 22, 2023, the worst performance versus four past zodiac years. The index slumped 16 per cent in 2011, rallied 70 per cent in 1999, lost 8.8 per cent in 1987 and surged 76 per cent in 1975.
The Shanghai Composite Index finished the Year of Rabbit with a 12 per cent loss, compared with a 17 per cent loss in 2011 and a 41 per cent rally in 1999. The index was only created in July 1991.
Other major Asian markets gained after US stocks closed overnight at an all-time high. Japan’s Nikkei 225 climbed 0.7 per cent and Australia’s S&P/ASX 200 added 0.2 per cent. South Korea’s market is closed for a holiday.
