Hong Kong stocks dip amid worries about China’s property crisis and an intensifying Middle East conflict

Hong Kong stocks gave up earlier gains that were fueled by China’s GDP data, which showed better than expected economic growth in the third quarter

Investors on edge as Country Garden, China’s once largest property developer, teetered on the brink of default and as the Middle East conflict intensified

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People walk through the piazza in front of the headquarters of Hong Kong Exchanges and Clearing Limited (HKEX), Central. Photo: Elson LI

Published: 10:54am, 18 Oct 2023Updated: 5:13pm, 18 Oct 2023

Hong Kong stocks erased gains as traders looked past China’s upbeat GDP data amid worries about the festering property crisis in the world’s second largest economy and the intensifying Israeli-Hamas war which is stoking oil prices and posing a risk to the global growth outlook.

The Hang Seng Index edged down 0.2 per cent to 17,732.52 at close of Wednesday trading, after gaining as much as 1 per cent mid-session. The Tech Index slipped 1.7 per cent, while the Shanghai Composite Index lost 0.7 per cent.

Tencent Holding lost 0.7 per cent to HK$300, Alibaba Group dropped 0.6 per cent to HK$81.45, and Baidu retreated 4.8 per cent to HK$113.70. E-commerce platform operator JD.com tumbled 3 per cent to HK$102.80 while Meituan lost 0.7 per cent HK$113.70.

Property stocks tumbled as Country Garden, the once largest property developer, teetered on the brink of default. A gauge tracking mainland developers listed in Hong Kong lost 0.7 per cent to a near 11-month low. Longfor lost 1.2 per cent to HK$11.92 while Evergande retreated 8.6 per cent to HK$0.26.

Official data released on Wednesday showed China’s economy continued to recover, with gross domestic product (GDP) expanding a consensus-beating 4.9 per cent in the third quarter from a year earlier. Meanwhile, industrial output and retail sales grew by 4.5 and 5.5 per cent, respectively, and both data points were higher than expected.

“The big question for markets is whether policymakers still have any stimulus measures up their sleeves,” said David Chao, market strategist at Invesco. “It’s clear to me that investors should not expect any kind of stimulus bazookas, though further measures are needed for the flailing property market,” he said.

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