Hong Kong stocks fall for a third straight day after China’s inflation data points to sluggish post-Covid recovery

Chinese consumer prices rose by 0.1 per cent year on year in April, the least in more than two years, showing post-Covid recovery remains sluggish

Inflation in the US also cooled last month, with the market now pricing in an 80 per cent chance of a Fed rate cut in September

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Pedestrians walk past a stock ticker outside Exchange Square, the building housing the Hong Kong stock exchange. Photo: EPA-EFE

Published: 10:54am, 11 May 2023Updated: 5:02pm, 11 May 2023

Hong Kong stocks fell for a third day in a row after inflation in mainland China cooled more than expected last month, indicating the economic recovery remains sluggish. SMIC and Hua Hong Semiconductors rose before their results.

The Hang Seng Index lost 0.1 per cent to 19,743.79 at the close of trading on Thursday, erasing gains of as much as 0.5 per cent earlier. The Tech Index gained 1.3 per cent, while the Shanghai Composite Index dropped 0.3 per cent.

Tencent Holdings dropped 1 per cent to HK$326.40 and Meituan declined 0.4 per cent to HK$128.50. Developer Longfor Group slid 2.9 per cent to HK$20.10 and Country Garden dropped 1.5 per cent to HK$1.94. China’s big three oil majors – PetroChina, Sinopec and CNOOC – dropped by 1.1 to 1.5 per cent.

Limiting losses, Alibaba Group Holding rose 3 per cent to HK$82.65 and Baidu advanced 1 per cent to HK$115.60. Li Auto surged 16 per cent to HK$114.80, leading a rally in auto stocks after posting record quarterly profit.

Data from the National Bureau of Statistics on Thursday showed consumer prices in China rose by 0.1 per cent in April from a year earlier, the slowest in more than two years, in a sign that China’s post-Covid recovery remains sluggish. While services prices jumped by 1 per cent year on year, the most in four months.

Separately, producer prices fell 3.6 per cent last month following a 2.5 per cent drop in March, the statistics bureau said, deepening a deflationary trend.

“The market sentiment is quite cautious now,” said Gary Ng, a senior economist at Natixis.

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