Hong Kong stocks drop for sixth day on heightened policy tightening risks, US-China tensions

Hang Seng Index slipped for a sixth day, heads for the longest losing stretch since late September 2019

Inflation at factory gates heightened risks to policy tightening while US-China ties appear to have worsened amid aggressive actions on both sides

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Published: 11:05am, 9 Jun 2021Updated: 5:15pm, 9 Jun 2021

Hong Kong stocks fell after a surge in factory-gate prices in China stoked concerns about further policy tightening while both the US and China took seemingly more aggressive legal measures to counter each other on economic and political issues.

The Hang Seng Index slipped 0.1 per cent to 28,742.63 for its sixth consecutive days of losses, equalling its longest losing streak since late September 2019. The Shanghai Composite added 0.3 per cent, while the CSI 300 gauge edged up 0.1 per cent.

Alibaba Health Information Technology paced losers among blue chips, falling 2.5 per cent to HK$18.08. Xiaomi declined 1.6 per cent to HK$27.90, while Anta Sports fell 1.5 per cent to HK$154.90.

Factory gate prices in China hit a 13-year high in May, a government report showed on Wednesday. The producer price index (PPI) rose 9 per cent from a year earlier, versus 6.8 per cent in April. This was faster than consensus for a 8.5 per cent increase in a Bloomberg survey.

In the US, the Senate on Tuesday passed a sweeping legislation designed to strengthen Washington’s hand in its escalating geopolitical and economic competition with China. The bill, which includes about US$250 billion worth of spending, touches on nearly every aspect of the tensed US-China ties. China separately was reported to be preparing to pass an anti-sanctions law of its own.