Hong Kong stocks fell, snapping a five-day advance as China showed no urgency in reflating the economy with growth lagging market expectations. Some Wall Street banks lowered their targets again.
The Hang Seng Index slid 2.2 per cent to 18,993.29 at the local noon trading break, from Friday’s level. Stocks and futures were halted on Monday on a typhoon warning. The Tech Index declined 2.4 per cent while the Shanghai Composite Index slipped 0.4 per cent.
Alibaba Group slumped 3.2 per cent to HK$89.95, e-commerce rival JD.com tumbled 4.4 per cent to HK$143.90 and Tencent dropped 3.8 per cent to HK$339.20. Property developer Longfor sank 10 per cent to HK$15.44, and peer Country Garden fell 7.3 per cent to HK$1.39. Macau casino operator Sands China weakened 1.9 per cent to HK$28.25, and peer Galaxy Entertainment lost 1.7 per cent to HK$53.55.
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China’s GDP grew at an annual pace of 6.3 per cent last quarter, trailing the consensus forecast of a 7.1 per cent gain. Beijing’s 2023 target of “around 5 per cent” is now under threat from weak consumer confidence, a struggling housing market, and record youth unemployment, analysts said.
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“We do not think [the GDP] data will prompt Beijing to step up stimulus measures,” Nomura analysts including Ting Lu wrote in a note. Growth will ease further in the second half and Beijing’s supportive measures will be “far from enough” to turn the economy around, they said.
Morgan Stanley, JPMorgan Chase and Citigroup trimmed their growth forecasts for China’s GDP this year to 5 per cent, according to Bloomberg data.
Weak consumer spending is threatening to drag the economy into a deflationary trap, with prices stalling in June while a decline in factory prices deepened. June home sales fell 18 per cent in volume and 19 per cent in value, the government said earlier.
Elsewhere, China’s top chip maker SMIC fell 2.6 per cent to HK$19.62, the biggest drop in two weeks, after the company named a new chairman on Monday as it faces further US chip curbs. Peer Hua Hong Semiconductors tumbled 4.1 per cent to HK$26.90.
Two stocks debuted in Hong Kong today. ZhongAn Intelligent Living Service slipped 2.5 per cent to HK$1.15, while New Media Lab climbed 2.2 per cent to 94 HK cents.
Major Asian markets were mixed on Tuesday. The Kospi Index in Korea and the S&P/ASX 200 Index in Australia declined by about 0.5 per cent, while the Nikkei 225 Index in Japan added 0.1 per cent.
More from South China Morning Post:
- China stocks slip, typhoon knocks out Hong Kong trading as GDP report pressures Beijing to stimulus economy
- Hong Kong stocks log best week in 6 months on Beijing’s ‘goodwill gestures’ as JD.com, NetEase, Alibaba jump 10 per cent
- Market bounce hands US$6.6 billion to Hong Kong’s super-rich as investors bank on China ‘returning to pragmatism’
- Chinese money managers pump US$351 million into own products in show of confidence as they navigate fragile market
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