Hong Kong stocks tumble as Politburo balm fails to soothe, Hang Lung dives post-earnings
Hong Kong stocks tumbled to a three month-low as investors fretted over the lack of forceful stimulative measures from China's Politburo meeting. Local developers tumbled, with Hang Lung Properties crashing to a 24-year low after it reported its income halved amid a property downturn.
The Hang Seng Index lost 1.4 per cent to 17,002.91 at the close of trade on Tuesday. The Tech Index tumbled 1.5 per cent, while the Shanghai Composite Index declined 0.4 per cent to a six-month low.
All but five of the 83 index members declined. Tencent tumbled 1.9 per cent to HK$351.40, leading decliners among tech heavyweights. EV giant BYD lost 3 per cent to HK$224.40 after it slashed prices for a premium model as the price war showed no signs of cooling.
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Losses deepened during the afternoon trading session, after the readout from Politburo meeting revealed little policy support following the Third Plenum letdown.
Beijing will step up macro policies and stabilise market confidence to ensure it achieves leaderships' full-year economic growth goal, as the economy faces "increasing negative influence" from the outside world and insufficient demand at home, according to the readout released on Tuesday.
"There's nothing new from the readout, just repeating the Third Plenum rhetoric," said Jason Chan, senior investment strategist at Bank of East Asia. "We do not see any specific measures that investors are looking for. The market could come under bigger pressure if economic data due this week disappoints again."
Adding to losses, local developer Hang Lung Properties dived 11.7 per cent to HK$5.64, the lowest level since 2000, after it reported a 56 per cent profit plunge in the first half amid prolonged property downturn. Peer Sun Hong Kai Properties tumbled 4 per cent to HK$67.10 and New World Developments slid 4.1 per cent to HK$7.01.
A key data release due this week is now expected to point to further shrinkage in China's manufacturing activity. The PMI manufacturing index on Wednesday is expected to fall to 49.4 in June from 49.5 in May, according to a Bloomberg survey of economists.
The city's benchmark index is now heading for a second consecutive monthly loss as investors are dismayed by China's tepid policy response to underwhelming economic fundamentals. That has erased all the year-to-date gains and pushed the local market to the ranks of among the worst performing major global markets.
Limiting losses, Standard Chartered recovered from the day's lows and gained 4.9 per cent to HK$76.90 after it announced a US$1.5 billion share buy-back plan, the lender's biggest ever purchase programme for its own shares.
Elsewhere, biotech firm Wuxi Apptec said net profit dropped 20 per cent to 4.2 billion yuan amid rising US-China rivalry. Its shares jumped 4.2 per cent to HK$29.95 while group company Wuxi Biologics lost 0.4 per cent to HK$10.52.
Other key Asian markets were mixed. Japan's Nikkei 225 added 0.2 per cent, Australia's S&P/ASX 200 declined 0.5 per cent and South Korea's Kospi declined by 1 per cent.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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