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Hong Kong stocks dropped to the lowest level in nearly 13 months after JPMorgan and HSBC predicted another bumpy year ahead amid economic headwinds. Better-than-expected data on manufacturing activity failed to lift the mood.
The Hang Seng Index fell 1.3 per cent to 16,830.30 at the close of Friday trading, the lowest since November 10 last year. The Tech Index dropped 1.8 per cent and the Shanghai Composite Index gained less than 0.1 per cent.
Alibaba Group lost 1.2 per cent to HK$71.85, Tencent Holdings dropped 2.4 per cent to HK$319 and Meituan tumbled 3 per cent to HK$87.90 after a wave of downgrades. EV maker BYD weakened 1.9 per cent to HK$206, while peer Geely Auto dropped 3.4 per cent to HK$8.22.
The Hang Seng Index has slumped for four straight months since July and has dropped nearly 15 per cent this year, the worst performance among major global stock indices, according to Bloomberg data. Foreign investors also pulled out of the A-share market for a fourth straight month, extending a record exodus to 129 billion yuan (US$18 billion) amid lack of conviction about the strength of recovery in the world’s second-largest economy.
“Things could get worse before getting better” in China given issues around the property sector, local government debt, banks’ non-performing loans and private-sector confidence, which means beaten-down Chinese stocks might not be able to turn the corner soon, JPMorgan and HSBC said.
A private report released on Friday that pointed to an unexpected expansion in China’s manufacturing data failed to overturn the bearish mood. The Caixin/S&P Global PMI manufacturing index rose to 50.7 in November from 49.5 in October, versus consensus estimates of 49.6. A report by the statistics bureau on Thursday showed activity further contracted last month, falling short of expectations.
HKEX issues consultation paper on ending stock-market shutdowns from July
HKEX issues consultation paper on ending stock-market shutdowns from July
Elsewhere, China Machinery Huanyu Certificate jumped 170 per cent to 45.44 yuan per share on the first day of trading in Shenzhen.
Asian stocks traded lower on Friday. Japan’s Nikkei 225 and Australia’s S&P/ASX 200 each dropped 0.2 per cent, while South Korea’s Kospi tumbled 1.2 per cent.
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