China, Hong Kong stocks end mixed as traders weigh whether Beijing is doing enough to boost virus-stricken economy

Hong Kong stocks advanced Wednesday while China shares lost ground, as traders weighed whether China is taking strong enough steps to boost its economy hammered by the deadly coronavirus.

China airline stocks took off on a Bloomberg report that Beijing is looking at possible bailout options. Meanwhile, several Apple suppliers rose after losses on Tuesday from the US tech giant’s warning that the pneumonia-like illness that has now claimed at least 2,000 lives will hurt its March quarter results.

The Hang Seng Index finished with a 0.5 per cent gain, at 27,655.81.

Meanwhile, the Shanghai Composite Index slipped 0.3 per cent to 2975.40 and the Shenzhen Component Index dropped 0.6 per cent to 11,235.60.

The CSI 300 gauge of large caps listed on Shanghai and Shenzhen declined 0.2 per cent to 4,051.31.

“Investors’ patience is limited. If there is not further monetary easing from PBOC, they won’t stay for long,” said Atta Capital portfolio manager Alan Li, referring to the People’s Bank of China. “If there’s no more money to fuel the market momentum, we may see more profit taking afterwards.”

Hong Kong is facing back-to-back annual recessions, according to a Bloomberg poll of experts, after the coronavirus hit an economy already battered by anti-government protests and the US-China trade war. Meanwhile, China is looking at a big hit to its first quarter economic growth, as it reels from the virus outbreak.

In Hong Kong, medical device manufacturer AK Medical Holdings shot up 9.4 per cent to HK$15.30, after saying it expects to see a more than 50 per cent increase in revenue for 2019, compared to the year before, and an 80 per cent increase in net profit over the same period.

It is seeing strong demand in the Chinese market, and gain of market share from products of foreign brands, it said in an overnight stock exchange filing.

Battery and car manufacturer BYD jumped 6.3 per cent to HK$48.10, over reports Tesla is in advanced talks with Shenzhen-listed Contemporary Amperex Technology, known as CATL, to use batteries without cobalt – one of the most expensive ingredients in electric vehicle batteries.

BYD is one of the largest manufacturers of cobalt-free batteries, analyst Li said. The market expects more orders for BYD.

CATL lost 2.2 per cent to 153.20 yuan.

Ping An Good Doctor declined 0.3 per cent to HK$78.35, after profit taking set in on the health care platform that has seen a rush of new users amid the coronavirus.

Index heavyweight Tencent advanced 0.8 per cent to HK$411.40.

Alibaba, the e-commerce giant and owner of the South China Morning Post, finished flat at HK$214.

Top Apple suppliers listed in Hong Kong and China rose.

In Hong Kong, AAC Technologies, which derives half of its revenue from Apple, rose 0.2 per cent to HK$56.80.

On the mainland, Apple AirPod suppliers Luxshare Precision gained 0.5 per cent to 46.08 yuan, while GoerTek shot up nearly 1 per cent to 23.66 yuan.

Airlines stocks rallied after the Bloomberg report, citing unnamed insiders, that China is considering cash injections, mergers between state-owned airlines and small carriers and other measures to offset the adversities faced by the aviation sector under the virus outbreak.

Air China jumped 1.3 per cent to HK$6.94. China Eastern Airlines gained 2.7 per cent to HK$3.84. China Southern Airlines advanced 2.4 per cent to HK$4.73.

Meanwhile, on the mainland, liquor distiller Kweichow Moutai gained 1.2 per cent to 1,096.50 yuan.