Hong Kong stocks approached a two-week low before reports this week that may show more signs of China’s economic slowdown. Banks slipped amid speculation they will be asked to lend more to support troubled property developers while BYD slumped on price war among Chinese EV makers.
The Hang Seng Index dropped 0.6 per cent to 17,458.67 at 10am local time to reach the lowest since November 17. The Tech Index slid 0.9 per cent, while the Shanghai Composite Index declined 0.6 per cent.
China’s top lender ICBC weakened 1.3 per cent to HK$3.74 while Construction Bank lost 1.1 per cent to HK$4.51. Alibaba Group dropped 0.7 per cent to HK$75.65, Tencent retreated 0.4 per cent to HK$320 and Meituan declined 0.5 per cent to HK$108.60. BYD tumbled 3.9 per cent to a three-month low of HK$219.40. The EV maker slashed prices on some older models by up to 10,000 yuan in a promotion campaign.
A government report today showed industrial profits rose 2.7 per cent in October from a year earlier, the slowest in three months and compared with 11.9 per cent in September. Manufacturing likely contracted in November, according to consensus forecasts by economists.
“We expect this month’s manufacturing to remain sluggish,” the US investment bank said in a report. With new home sales slowing again in November, “more easing measures are needed to reduce left-tail risks”, it added.
The Hang Seng Index is attempting to chart its first monthly advance since July amid China’s efforts to restore growth. The benchmark has risen 2.6 per cent this month, having lost a cumulative 15 per cent in the preceding three months. Still, Beijing will need to do more to arrest a slide in economic activity, Goldman Sachs said.
Elsewhere major Asian markets were mixed on Monday. Australia’s S&P/ASX 200 declined 0.2 per cent, while South Korea’s Kospi added 0.5 per cent and Japan’s Nikkei 225 was little changed.
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