Most Hong Kong stocks weaken as global markets dive into bear market on Fed tightening overdrive, China lockdown concerns
- Hang Seng Index halted a three-day slide, with tech stocks paring losses after global equities slipped into bear market
- Virus cases rebounded in Beijing, renewing lockdown concerns under China’s zero-Covid policy, while Hong Kong to toughen rules from Wednesday
The Hang Seng Index was little changed at 21,067.99 at the close of Tuesday trading, halting a three-day slide. The index earlier lost as much as 1.7 per cent. The Tech Index fell less than 0.1 per cent, while the Shanghai Composite Index added 1 per cent. Benchmarks in major Asia-Pacific markets lost by 0.5 per cent to 3.6 per cent.
Losers still outnumbered gainers. Alibaba Group Holding, the owner of this newspaper, fell 2.5 per cent to HK$101.20 while AIA Group dropped 0.6 per cent to HK$78.60 and Tencent Holdings lost 0.3 per cent to HK$376. All of them pared steeper declines during the day.
“The [US] inflation data has raised market expectations that the Fed could hike by more than 50 basis points this week, and opt for a 75 basis points increase instead,” said Tai Hui, chief market strategist at JPMorgan Asset Management in Hong Kong. “Slamming on the brakes too hard risks pushing the economy off its track.”
The Fed holds its open-market committee meeting this week, and is poised to raise its target rate for a third time in the lift off. A government report on Friday showed US inflation re-accelerated in May by 8.6 per cent, the fastest since 1981.
Most stocks in Hong Kong traded off their lows, as investors deemed the sell-off as excessive, according to Banny Lam, managing director and head of research at CEB International Investment in Hong Kong. There was “a little overshooting to the downside and now markets think it is inexpensive.”
In Shenzhen, Sichuan Qiaoyuan Gas soared 71 per cent to 28.98 yuan on its first day of trading, while Audiowell Electronics (Guangdong) Company fell 7.5 per cent to 10.18 yuan in Beijing.