Hong Kong stocks slip, blowing hot and cold on China stimulus blank as projected rate hike bothers markets

Chinese tech leaders surrender more of their gains from last week as hopes for Beijing’s urgent policy stimulus wane

Hong Kong developers suffer from worries another rate hike next week could undermine home sales, prices

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An elderly looks at an electronic screen displaying the Hang Seng Index and stocks outside a bank in Mong Kok, Hong Kong. Photo: Winson Wong

Published: 10:39am, 19 Jul 2023Updated: 4:56pm, 19 Jul 2023

Hong Kong stocks extended losses amid lingering concerns about China’s economic outlook and sluggish stimulus response. Property developers dropped as a projected rate hike next week is seen undermining home sales.

The Hang Seng Index slipped for a second day, losing 0.3 per cent to 18,952.31 at the close of Wednesday trading, paring an earlier setback of as much as 1.6 per cent. The Tech Index declined 0.4 per cent while the Shanghai Composite Index gained less than 0.1 per cent.

Tencent dropped 1 per cent to HK$333, Meituan lost 1.1 per cent to HK$127.70, and Netease declined 1.2 per cent to HK$163.10. Macau casino operator Sands China weakened 0.9 per cent to HK$28.15 while travel agency Trip.com fell 1 per cent to HK$286. Sportswear maker Li Ning lost 1.5 per cent to HK$40.50 while Anta fell 1.8 per cent to HK$82.95.

“The market sentiment is chaotic” as investors are still reeling from weaker-than-expected economic data, Zhao Wei, an analyst at Founder Securities wrote in a note on Wednesday. “The stimulus policy will remain conservative in the second half and the market will go through several rounds of correction amid disappointment.”

Chinese investors are turning to foreign stocks and bonds as the domestic economy weakened and the onshore stock markets struggled to perform, according to EY, a consultancy. Growth quickened last quarter to 6.3 per cent from 4.5 per cent in the preceding three months, trailing market consensus.

Sun Hung Kai Properties fell 0.3 per cent on Tuesday to HK$95.60, leading declines in the city’s biggest home builders. Henderson Land lost 0.2 per cent to HK$22.95 and New World Development slipped 2 per cent to HK$17.96.