Yahoo Finance Hong Kong snap 2-day rally as investors turn cautious ahead of US data
Hong Kong stocks ended marginally lower on Wednesday after investors turned cautious ahead of key US non-farm payroll data later this week, reversing two days of gains. Weaker-than-anticipated US jobs data published overnight had stoked rate cut hopes earlier in the day.
The Hang Seng Index fell 0.10 per cent to close at 18,424.96, after rising as much as 1.5 per cent midsession. The Tech Index added 0.3 per cent, while the Shanghai Composite Index eased 0.8 per cent.
"US non-farm payrolls data looms large this week and has the potential to shift rate-cut expectations from the Fed," said Tim Waterer, the chief market analyst at KCM Trade in Sydney. "Some high profile risk events are still to come for financial markets this week. I think investors are erring on the side of caution and taking some risk off the table."
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US markets rose overnight after data showed job openings fell more than estimated in April to the lowest point in over three years, reviving speculation of an early cut to interest rates.
A food delivery courier for Meituan. The company releases its quarterly earnings this evening. Photo: Bloomberg alt=A food delivery courier for Meituan. The company releases its quarterly earnings this evening. Photo: Bloomberg>
Job openings, a measure of labour demand, fell 296,000 to 8.059 million in April, the lowest since February 2021, according to the US Labor Department. Economists polled by Reuters had forecast 8.355 million job openings in April.
A Wall Street Journal poll expects non-farm payroll, due on Friday, of 190,000 for May.
Food-delivery platform Meituan rose as much as 2.2 per cent ahead of its first-quarter earnings report this evening, before surrendering gains to close 0.8 per cent lower at HK$112.60.
"We expect solid first quarter results with sequentially improving margins from second quarter for in-store," said Goldman Sachs analysts in a report, which had a buy rating with a 12-month target price of HK$139, implying an upside of 23 per cent from the current levels. The company follows the calendar year for financial reporting.
Trip.com Group's shares fell 1.9 per cent to HK$400.60 after it announced a US$1.3 billion convertible bond issue to fund repayment of existing debt, expand its overseas business and for working capital needs. The note has a 0.75 per cent coupon and converts to equity at a 32.5 per cent premium.
"We expect some near-term share price volatility amid convertible bond hedging activity and possible profit-taking by short-term investors," Citigroup analysts said in a report on China's largest travel platform. "We expect financing cost likely to be reduced with repayment of existing borrowings, and dilution impact could be mitigated by the cash-par settlement upon conversion."
Other key Asian markets were broadly higher. Australia's S&P/ASX 200 rose 0.4 per cent, South Korea's Kospi advanced 1 per cent, but Japan's Nikkei 225 lost 0.9 per cent.
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