Hong Kong stocks slide, index below 18,000 after China inflation data signals weak demand
- China’s consumer price rise was weaker than expected and producer prices fell for the 20th consecutive month, reflecting tepid demand conditions
The Hang Seng Index fell 1.3 per cent to 17,937.84 at the close, and a close below 18,000 was the first such instance since April 30. The Hang Seng Tech Index slid 1.7 per cent, while the Shanghai Composite Index rose 0.3 per cent.
“The deflationary pressure has not faded yet,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management in Hong Kong. “A more comprehensive and proactive policy stance covering fiscal, monetary, and property sector may be necessary to boost domestic demand more effectively.”
Hong Kong property developers weakened ahead of the US Federal Reserve’s rate-setting meeting on Thursday as concerns remained that the interest-rate environment would keep the cost of home purchases elevated. Hong Kong’s monetary policy moves in lock-step with the United States as the city’s currency is pegged to the US dollar. New World Development tumbled 3.5 per cent to HK$7.78 and Sun Hung Kai Properties fell 1.6 per cent to HK$71.60.
Tencent Holdings slipped 0.8 per cent to HK$370.80 and Alibaba Group Holding also lost 0.9 per cent to HK$74.15.