Hong Kong stocks rise modestly after Trump comments on trade talks temper optimism over Fed rate increases
The Hong Kong stock market closed higher, with a tepid turnover, after a choppy session on Thursday, as optimism that the US Federal Reserve was unlikely to accelerate the pace of interest rate increases was offset by comments made by US President Donald Trump, which suggested a setback in the US-China trade talks.
Trump on Wednesday called for “a different structure” in any trade deal with China, fuelling uncertainty over the negotiations.
The US commerce department also said it would launch a national security investigation into car and truck imports under Section 232 of the Trade Expansion Act of 1962, a move that could lead to tariffs like those imposed on steel and aluminium imports in March.
Elsewhere, the recently released minutes from the Federal Reserve’s May 1-2 meeting were seen as dovish, easing market concerns that the Fed would raise interest rates more quickly than expected.
But most Federal Reserve policymakers still thought another interest rate increase would be warranted “soon” if the US economic outlook remains intact, the minutes showed.
In Hong Kong, the Hang Seng Index rose modestly by 0.31 per cent, or 94.77 points, to 30,760.41, keeping within the tight range between 29,500 and 31,600, where it is has been trading in the past few months. The Hang Seng China Enterprises Index gained 0.51 per cent, or 61.83 points, to 12,152.62. The turnover was HK$90.77 billion (US$127 million).
“The market continues to range trade because investors are very selective, weighed by concerns over a weak Hong Kong dollar and tighter liquidity,” said Castor Pang Wai-san, head of research at financial services company Core Pacific Yamaichi.
Lenovo Group climbed by 2.09 per cent to HK$3.91 despite swinging to an annual loss. Chinese telecoms stood out: China Mobile gained 1.44 per cent to HK$72.60 and China Unicom (Hong Kong) added 2.38 per cent to 11.20, while China Telecom was 3.75 per cent higher at HK$3.75.
Property developers too fared well. The China Evergrande Group advanced by 1.43 per cent to HK$24.75, Longfor Properties added 2.56 per cent to HK$24, Country Garden Holdings was 1.01 per cent higher at HK$15.96 and Powerlong Real Estate Holdings rose by 2.78 per cent to HK$4.81.
Sinopec gained 2.47 per cent to HK$7.89, adding 16 points to the benchmark index, the biggest constituent contributor. PetroChina was up by 1.46 per cent at HK$6.24, although CNOOC edged down 0.29 per cent to HK$13.60.
Alibaba Pictures Group soared by 31.52 per cent to HK$1.21, pushed up by a six-day increase in Alibaba Health Information Technology, which added 1.47 per cent to HK$6.89 on Thursday. Apple supplier AAC Technology climbed 1.22 per cent to HK$116.20.
CK Infrastructure Holdings rose by 1.01 per cent to HK$59.85 after JPMorgan said it was now a good time to revisit after a 6 per cent underperformance against its peers last week. It was now trading at an attractive dividend yield of 5.4 per cent.
BYD slid by 1.95 per cent to HK$52.70, Dongfeng Motor Group lost 1.86 per cent to HK$8.95 and Geely Automobile Holdings eased by 0.22 per cent to HK$22.70.
In China, mainland stocks were down, with the Shanghai Composite Index falling by 0.45 per cent, or 14.31 points, to 3,154.65, while the CSI 300, which tracks the large caps listed in Shanghai and Shenzhen, fell by 0.71 per cent, or 27.36 points, to 3,827.22.
The Shenzhen Composite Index shed 0.42 per cent, or 7.67 points, to 1,827.05, and the Nasdaq-style ChiNext was lower by 0.41 per cent, or 7.57 points, to 1,838.40.
Technology-related stocks led the declines. Q Tech slid by 2.19 per cent to 6.70 yuan, VSTECS Holdings dropped 1.72 per cent to 4 yuan and Nanfang Communication Holdings eased by 0.91 per cent to 4.38 yuan.
Carmakers also dropped, with Zhongsheng Holdings falling 1.80 per cent to 24.60 yuan, BYD down by 1.95 per cent to 52.70 yuan and Geely losing 0.22 per cent to 22.70 yuan.