Hong Kong stocks declined, surrendering an early bounce, after a surprise contraction in manufacturing reignited concerns about China’s recovery outlook. Foreign investors retreated before the Federal Reserve’s rate decision this week. HSBC rose before its first-quarter earnings today.
The Hang Seng Index dropped 0.5 per cent to 19,802.38 at 10.10am local time after surging by as much as 2 per cent. The benchmark index fell 2.5 per cent in April. The Tech Index retreated 0.7 per cent, adding to a 9.4 per cent loss last month. Financial markets in mainland China are closed through Wednesday for the May Day holiday.
Alibaba Group fell 0.5 per cent to HK$81.70 and Tencent slipped 0.2 per cent to HK$343.30 while developer Longfor Group declined 3.3 per cent to HK$20.65. Limiting losses, carmaker Xpeng climbed 0.3 per cent to HK$37.70 and casino operator Galaxy Entertainment jumped 1 per cent to HK$56.05.
Chinese manufacturing shrank in April, after an official index fell to 49.2 in April from 51.9 in March, the statistics office said on Sunday, trailing market expectations. Sub-gauges on new orders and export orders also shrank. The weak data overshadowed optimism about a rebound in consumption, including a surge in Macau gaming revenue in April.
Foreign investors pulled 4.6 billion yuan (US$658 million) from the onshore stock market in April, ending a five-month buying streak, according to Stock Connect data.
Elsewhere, HSBC gained 0.3 per cent to HK$56.05. The UK-based lender and the city’s biggest commercial bank probably made a higher profit last quarter in line with peers such as Standard Chartered. The report card is due at noon local time today.
Major Asian markets were mixed. The Nikkei 225 in Japan increased 0.2 per cent and the Kospi in South Korea rose 0.7 per cent, while the S&P/ASX 200 in Australia dropped 0.2 per cent.
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