Hong Kong stocks rocked by volatility as investors await China policy easing
- Goldman Sachs said this week’s cuts echoed China’ concerns about weak domestic demand and added that it expects more policy easing to boost demand
The Hang Seng Index added 0.1 per cent to 17,021.31 at the close after falling as much as 0.5 per cent and rising 1.3 per cent to an intra day high. Still, the benchmark posted a 2.3 per cent weekly loss, the second consecutive down week. The Hang Seng Tech Index gained 0.7 per cent, while the Shanghai Composite Index added 0.1 per cent.
Investors now await a Politburo meeting, expected to be held later this month, for clues as to how President Xi Jinping will fix economic issues like a home sales slump and weak consumer spending.
“The economic fundamentals don’t lend too much support to the market and the key is to watch how the policy will change and how it will be implemented,” said Song Yiwei, an analyst at Bohai Securities in Tianjin. “If the key Politburo meeting delivers signals of stabilising growth, there’s a chance that the market will continue to recover. Otherwise, trading and sentiment will be sluggish.”
The yield on China’s 10-year government bond dropped 2 basis points to 2.189 per cent to a record low on Friday, as haven trades gained traction after the central bank unexpectedly cut both the policy interest rate and a short-term interest rate this week.