Hong Kong stock turnover slumps as investors await Fed clues, with Shanghai market flat
Hong Kong’s stockmarket came off the boil on Wednesday, with turnover slumping to the lowest since the rally ramped up after the Easter break. Investors took a breather ahead of a Federal Reserve meeting that may give clues to US interest rate policies, with the city’s benchmark dipping 0.15 per cent and its Shanghai counterpart eking out a meagre gain.
The Hang Seng Index shed 42.41 points to 28,400.34, narrowing losses seen in the early afternoon after gains in Hong Kong property stocks.
Total market turnover dropped to HK$163.1 billion, a far cry from the daily average of HK$261 billion over the past three weeks. On April 9, the city’s trading volumes surpassed that of the United States for the first time, at a record HK$293.9 billion, as a flood of capital from mainland China swept into the market on a bargain hunt after a sustained rally across the border.
The H-share index, a gauge of mainland Chinese stocks listed in the city, dropped 0.76 per cent, or 112 points, to 14,603. The Shanghai Composite inched up 0.01 per cent, or 0.4 point, to end at 4,476, despite repeated warnings from the mainland China securities regulator over rising risks for investors.
“Investors are on the sidelines before the US Federal Reserve’s meeting [on Wednesday], even though the market doesn’t anticipate any major change in interest rate policy, given the lukewarm growth in the real economy,” said Ben Kwong Man-bun, a director of KGI Asia. Recent weakness in the US dollar had deepened the cautious sentiment over the prospects for the world’s largest economy, he said.
Among the property stocks that rose on Wednesday, Hang Lung Properties jumped 7.8 per cent to HK$26.20, while New World Development climbed 2.5 per cent to HK$10.08. Deutsche Bank analysts said property developers in Hong Kong would fare better than shopping mall operators after Beijing announced a cut in tariffs on import goods that may reduce demand from mainland shoppers.
In a research note, ABN Amro analysts on Wednesday said they expected the Fed to continue to signal that it is unlikely to raise its policy rate at the Wednesday meeting. The central bank would need further evidence of an improvement in labour market, with the inflation rate moving back towards its 2 per cent target, they said.