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Screens showing the index and stock prices outside Hong Kong Exchange Square (HKEX) in Central. Photo: Sun Yeung
BusinessChina Business

Hong Kong stocks flat as investors turn cautious ahead of key data releases

  • Electric vehicle makers rally after China Commerce Minister says accusations of EV overcapacity are groundless
  • This week, China is due to release data on inflation and foreign trade while the central bank may also publish loans, money supply and aggregate financing data
Hong Kong stock market
Zhang Shidong
Zhang Shidongin Shanghai
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Hong Kong stocks ended flat but the mood was cautious as investors focused on a swathe of key economic data due to be released later this week to get insights about the strength of the recovery in the world’s second largest economy.

The Hang Seng Index added 0.1 per cent to 16,732.85 at the close. The Hang Seng Tech Index slipped 0.2 per cent and the Shanghai Composite Index lost 0.7 per cent.

Li Auto rallied 4.1 per cent to HK$120.80 and BYD climbed 2.1 per cent to HK$202. China’s Commerce Minister Wang Wentao said US and European accusations of EV overcapacity are groundless and that Chinese electric vehicle companies were not reliant on government subsidies to gain competitive advantages. Drug maker Wuxi Biologics rose 5.4 per cent to HK$14.08 and affiliate Wuxi AppTec climbed 3.4 per cent to HK$36.35.

Budweiser Brewing slumped 5.7 per cent to HK$10.58 after Jefferies expected the brewer to report flat sales in the first quarter and peer China Resources Beer sank 4.8 per cent to HK$33.90.

China is due to release March inflation data on Thursday and foreign trade statistics on Friday. The central bank may also reveal figures on new loans, money supply and aggregate financing during the week. The March and first-quarter data will be crucial as many global fund managers have turned positive on Chinese stocks, after a raft of market rescue measures. But some analysts say more stimulus will be required.

“Given the lingering growth headwinds, we think more policy stimulus may be needed to stabilise growth, especially for the property sector, including stronger support for developer financing, more coverage of the ‘white-list’ scheme to ensure delivery of stalled projects, and more direct purchase of existing home inventory by local governments,” said Wang Tao, an economist at UBS Group.

Sentiment earlier also got a lift after official data showed that tourism revenue in the extended three-day Ching Ming Festival that ended on Saturday increased 13 per cent from the pre-Covid level in 2019 to 54 billion yuan (US$7.5 billion). About 120 million domestic trips were made in the period, up 12 per cent from 2019, according to the Ministry of Culture and Tourism.
Investors are also tracking the visit by US Treasury Secretary Janet Yellen, who wrapped up her visit to China after meeting with Premier Li Qiang on Sunday to talk about issues including industrial overcapacity and climate changes. The two nations agreed to hold extensive exchanges on balanced growth in the domestic and global economies.

Two companies started trading on the mainland exchanges. Changzhou Wujin Zhongru Electronic Technology, which makes lithium-battery accessories, jumped 74 per cent from its IPO price to 37.754 yuan in Shenzhen and Wuxi Dingbang Heat Exchange Equipment surged 65 per cent to 10.20 yuan in Beijing.

Other major Asian markets were broadly higher, tracking gains in US stocks buoyed by robust jobs data. Japan’s Nikkei 225 climbed 0.9 per cent, while South Korea’s Kospi rose 0.1 per cent and Australia’s S&P/ASX 200 added 0.2 per cent.

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