Hong Kong stocks trend lower as China import data points to weak domestic demand

China’s imports rose 1.8 per cent year on year in May, decelerating from an 8.4 per cent gain in the previous month, and exports were up 7.6 per cent, according to the customers office.

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Published: 11:02am, 7 Jun 2024Updated: 4:42pm, 7 Jun 2024

Hong Kong stocks eased on Friday after official data showed China’s imports slowed, underscoring the challenge facing the world’s second-largest economy to revive domestic demand.

The Hang Seng Index fell 0.6 per cent to close at 18,366.95. Still, the benchmark ended the week with a 1.6 per gain. The Hang Seng Tech Index dropped 1.8 per cent, while the CSI 300 Index slid 0.5 per cent, with smaller companies leading the sell-off despite the assurance from the regulator downplaying delisting risks.

Markets in Hong Kong and the mainland will be shut on Monday for a public holiday.

Better-than-expected data on China’s exports failed to impress investors as the focus remained on tepid domestic demand reflected in slowing imports. Deceleration in imports, which rose just 1.8 per cent in May versus last month’s 8.4 per cent jump, worried analysts.

“The data shows that China’s economic recovery is bumpy and the issue of weak demand still needs to be addressed,” said Song Yiwei, an analyst at Bohai Securities in Tianjin. “June will be a window for investors to observe the effect of all these supportive policies, particularly the ones on the property market. If there’s a pickup in high-frequency data or signs of fresh reform, that will lift market expectations and push the market further higher.”

“Shenxing”, a fast-charging lithium iron phosphate (LFP) battery made by China’s EV battery maker Contemporary Amperex Technology Co., Ltd. (CATL), is displayed during the press preview of the 2023 International Motor Show (IAA) in Munich, Germany, Sept. 4, 2023. Photo: Xinhua

Bank of America expects Chinese stocks to be rangebound over the next few weeks as investors await fresh catalysts such as June macro data, home transaction updates and the Chinese Communist Party’s third plemum that may outline a path for long-term reforms and economic policies. A technical analyst from trading firm Oanda said that Hong Kong stocks could extend gains, due to the widening breadth of the run-up.

Hong Kong stocks trend lower as China import data points to weak domestic demand

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;}China’s imports rose 1.8 per cent year on year in May, decelerating from an 8.4 per cent gain in the previous month, and exports were up 7.6 per cent, according to the customers office.

China’s imports rose 1.8 per cent year on year in May, decelerating from an 8.4 per cent gain in the previous month, and exports were up 7.6 per cent, according to the customers office.