Hong Kong stocks sink to a 5-week trough as China data points to patchy economic recovery

China’s economy grew by a consensus-beating 5.3 per cent in the first quarter of 2024, but retail sales and industrial output data missed economists’ estimates

The property market remained subdued with new home prices falling 0.34 per cent in March from the previous month, the 10th straight month of decline

Reading Time:2 minutes

The Exchange Square where the Hong Kong Stock Exchange (HKEX) is housed. Photo: Xiaomei Chen

Published: 10:35am, 16 Apr 2024Updated: 4:46pm, 16 Apr 2024

Hong Kong stocks declined for the fourth day, taking the benchmark to a five week-low, as a batch of official figures from China pointed to a shaky and patchy recovery in the world’s second-largest economy.

The Hang Seng Index retreated 2.1 per cent to 16,248.97 at close on Tuesday, hitting the lowest level since March 7. The Tech Index fell 3 per cent, while the Shanghai Composite Index tumbled 1.7 per cent.

All but three of the 82 index members declined. E-commerce group Alibaba Group slipped 3.3 per cent to HK$68.05 and peer JD.com declined 2 per cent to HK$99.15. Macau casino operator Sands China tumbled 5.8 per cent to HK$19.72 and peer Galaxy Entertainment lost 4.9 per cent to HK$36.80.

China’s economy grew by 5.3 per cent in the first quarter of 2024, the National Bureau of Statistics said on Tuesday, above the 4.8 per cent estimate and the 5.2 per cent growth seen in the fourth quarter of last year.

However, retail sales growth slowed to 3.1 per cent in March year on year, lagging the 5.5 per cent growth in January and February combined, and industrial output rose by 4.5 per cent last month. Both readings missed economists’ estimates.

“While China’s headline GDP figure offered a glimmer of optimism, the underlying weakness in domestic demand and industrial activity suggests that challenges persist for the world’s second-largest economy,” said Stephen Innes, managing partner at SPI Asset Management. Investors remain cautious amid uncertainties surrounding the pace and sustainability of China’s economic recovery, he added.