Hong Kong stocks wavered as reports showed China services activity hit 7-month high but US trade feared dent optimism.
China's services activity expanded at the fastest pace in seven months in December, driven by a surge in domestic demand, but orders from abroad declined, reflecting growing trade risks to the economy, a private sector survey showed on Monday.
The Caixin/S&P Global services purchasing managers' index (PMI) rose to 52.2 in December from 51.5 the previous month. The growth pace was the fastest since May 2024, surpassing the 50-mark that separates expansion from contraction on a monthly basis.
The Hang Seng Index fell 0.1% to 19,730.55 at 11.30am local time, adding to a 1.6% loss in the first trading week of 2025. The Tech Index was flat.
Chinese EV makers NIO jumped 4.8%, and XPeng rose 3.8%; The e-commerce operator JD.com gained 1.6%; Semiconductor producer SMIC rose 1.5%; Xiaomi rose another 1.2% to hit a new high again.
While Meituan dropped 2.9%; Kuaishou fell 2%; Tencent and Bilibili fell more than 1%.
While China’s economy showed recovery last quarter, the outlook remains cloudy as policymakers struggle to prod consumers to spend. Export bans on certain materials and commodities have also undermined the outlook for external trade, two weeks before president-elect Donald Trump takes over the White House.
The Caixin/S&P Global manufacturing PMI fell to 50.5 in December from 51.5 in November, trailing market consensus for an advance to 51.7, a report last week showed. It mirrored a slowdown in the official manufacturing index reported by the statistics bureau on December 31.
The price sub-indices of both PMI reports showed increased deflationary pressures in December, Goldman Sachs economists said in a report on Sunday.
China’s central bank on Saturday said it will ramp up support for the technology and consumption sectors to shore up the economy and reiterated its “moderately loose monetary policies” to lower interest rates and reserve requirement ratio for banks “at appropriate time” for a stable economic growth.
To spur consumption, Beijing has also announced that its trade-in subsidy programme will be expanded in 2025 to products including smartphones, computer tablets and smartwatches.
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