Hong Kong stocks fall on weak confidence, as US-China tension and coronavirus toll weigh on sentiment

Hong Kong and China stocks slipped Thursday on shaky investor confidence amid growing US-China tension and ongoing worry about the coronavirus pandemic’s damage to the world’s economies. Hong Kong snapped a two-day winning streak, as investors cashed in on run-ups in everything from casinos to property stocks. Hong Kong Exchanges and Clearing, or HKEX, was the top loser among blue chips, falling 2.8 per cent as chief executive Charles Li Xiaojia said he will not seek reappointment next year and the city’s stock market operator announced a 13 per cent decline in net profit in the first quarter. The Hang Seng Index fell 0.7 per cent to 23,980.63, continuing its pattern over the past month of trading within a narrow band. “People are tending to wait and see at this point,” said Alan Li, portfolio manager at Atta Capital. “And there are not many stocks cheap enough to make people ... buy now.” China stocks slid as well, even as China’s exports unexpectedly grew in April. Budweiser APAC posts net loss of US$41 million in first quarter as Covid-19 forces nightclubs, restaurants to close The Shanghai Composite Index finished down 0.2 per cent to 2,871.52. Meanwhile, the CSI 300 gauge of large-caps listed in Shanghai and Shenzhen shed 0.3 per cent to 3,924.89 and the tech-focused ChiNext fell 0.2 per cent to 2,106.84 yuan. In a surprise, China’s exports rose 3.5 per cent from a year earlier, according to data out Thursday, but economists expressed doubt it will continue to grow like that given the demand shock of the coronavirus. The jump in exports ballooned China’s trade balance to US$45.34 billion, significantly higher than the US$19.9 billion in March. Economists have cut forecasts for China’s GDP growth in 2020, some to even below 2 per cent. Meanwhile, first-quarter corporate earnings in China have been the weakest in a decade. News of the turmoil of the coronavirus was highlighted again in data out of the US – the world’s largest economy – showing a loss of 20.2 million private payroll jobs in April. The US has the most number of infections and deaths. The global death toll of the respiratory ailment has reached nearly 264,000. Donald Trump, who faces a tough re-election battle in the November presidential race, has ratcheted up his anti-China rhetoric, warning Beijing it could face tariffs if it does not meet the agreed-upon purchases in the phase one trade deal. Top trade negotiators will speak about the trade deal as early as next week, Bloomberg reported. “Trump expects China to live up to their end of the trade deal and that seems to have no chance of happening because of Covid-19,” said Edward Moya, senior market analyst at OANDA. “Risk appetite will struggle to gain any traction as coronavirus continues to show signs the Americas are not near their peak (Brazil and Mexico both had their worst days), suggesting reopening the economy will be a much slower process.” In Hong Kong, property developers including Sun Hung Kai Properties, Sino Land, Henderson Land Development and CK Asset fell after gaining two days. Sands China led Macau casino operators down, falling 1.9 per cent. Budweiser Brewery APAC dropped 2.5 per cent to HK$21.20, after posting a net loss of US$41 million in the first quarter, which it blamed on lockdowns of restaurants and bars to fight the coronavirus. Restaurant shares mostly dropped after the industry reported grim results. Earnings for the city’s food and beverage industry shrank 31.2 per cent in the first quarter, the biggest year-on-year decline on record, official figures showed on Wednesday. Fast food giant Cafe de Coral fell 2.3 per cent, while rival Fairwood Holdings retreated 2 per cent. Elsewhere in the Asia-Pacific region, stocks were mixed. Japan’s Nikkei 225 rose 0.3 per cent after three sessions of holidays. Prime Minister Shinzo Abe on Monday extended the country’s national state of emergency until the end of the month. South Korea’s Kospi fell a teensy 0.01 per cent, while the tech-heavy Kosdaq gained 1.5 per cent. In Australia, which is facing its first recession in almost three decades, the S&P/ASX200 dropped 0.4 per cent. The country is preparing to relax its lockdown, which has cost the economy an estimated A$4 billion (US$2.4 billion) a week, on Friday. New Zealand’s S&P/NZX50 Index advanced 0.7 per cent. Singapore’s markets are closed for a public holiday.

Hong Kong stocks fall on weak confidence, as US-China tension and coronavirus toll weigh on sentiment

.css-1mniedq{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;} HKEX drops 2.8 per cent as it reports a 13 per cent decline in net profit China stocks slip as well, as trade friction between world’s biggest economies flares up again

HKEX drops 2.8 per cent as it reports a 13 per cent decline in net profit

China stocks slip as well, as trade friction between world’s biggest economies flares up again