- Investors prepare for potential tonic from the two sessions in Beijing later this week as the China reopening bets lost momentum over the past four weeks
- Xpeng, Weibo advance in early trading before their inclusion in key market indices from next month
Hong Kong stocks wavered as traders await policy signals from China’s most important political gatherings later this week to shore up the economy. Carmaker Xpeng advanced pending an index inclusion next month. Higher US rate outlook weighed on sentiment.
The Hang Seng Index gained 0.1 per cent to 19,990.07 as of 11.19am local time, after losing as much as 1 per cent in early trading. The Tech Index added 0.2 per cent while the Shanghai Composite Index was little changed.
Alibaba Group climbed 1.2 per cent to HK$91.10 while hotpot chain Haidilao surged 16.8 per cent to HK$22.50 and Baidu jumped 4 per cent to HK$136.50. Limiting gains, carmaker BYD slid 2.5 per cent to HK$217.40 while Galaxy led losses among Macau casino operators with a 1.6 per cent slide to HK$52.40.
The National People’s Congress and the Chinese People’s Political Consultative Conference, will hold their annual meetings – known as the “two sessions” – in Beijing from March 4 with analysts and money managers pinning their hopes on more policy stimulus as the China reopening play lost momentum this month.
“Investors are now still hesitant about the sustainability and speed of economic recovery,” Li Xukun, a fund manager at CICC said, in a note on Sunday. The market generally does not expect any support to be very aggressive, he added.
The Hang Seng Index has slumped for four straight weeks into a technical correction of more than 10 per cent from its recent peak on January 27. More than US$452 billion of market capitalisation has been erased from the city’s stock market in the process.
Foreign investors withdrew from the Chinese market last week by selling about US$600 million worth of A shares, according to Goldman Sachs. Hedge funds have also been reducing their net exposure in the past few weeks, the US bank said.
Elsewhere, Xpeng rose 1.3 per cent to HK$35.20 after the city’s index compiler agreed to add the electric-vehicle maker to the Hang Seng China Enterprises Index from March 13, following a quarterly review. Weibo jumped 1.6 per cent to HK$162.80 as the compiler added the microblogging platform operator to the Tech Index.
Asian shares slipped, tracking steep losses on Wall Street last Friday. Concerns are growing that the Federal Reserve will tighten more aggressively in coming meetings amid stronger consumer prices. South Korea’s Kospi lost 0.8 per cent and the S&P ASX 200 in Australia retreated 1.2 per cent, while the Nikkei 225 weakened 0.2 per cent.
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