Hong Kong stocks waver as developers gain while JD.com tumbles after Daiwa slashes target price
Hong Kong stocks rose for a second day with investors banking on China to further pump-prime its economy this year. Gains were limited amid reports of potential US ban on chip shipment to China and a slump in JD.com after Daiwa slashed its price target by almost one-fifth.
The Hang Seng Index added 0.1 per cent to 19,172.05 at the close of Wednesday trading, after losing as much as 0.7 per cent. The benchmark index jumped 1.9 per cent on Tyuesday. The Tech index gained 0.9 per cent, while the Shanghai Composite Index also erased losses to close little changed.
Developer Longfor Group gained 1.8 per cent to HK$19.68 while Macau casino operators Sands China gained 1.5 per cent to HK$27.70 and peer Glaxy rallied 2 per cent to HK$51.60.
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Limiting gains, Alibaba Group dropped 1.3 per cent to HK$84.35 while Tencent fell 1.5 per cent to HK$336.20. JD.com tumbled 1.2 per cent to HK$138 after Daiwa slashed its 12-m0nth price-target by 19 per cent, a day after a call with the company for business update.
China's biggest chip maker SMIC fell 0.5 per cent to HK$20.60, after sliding as much as 1.5 per cent. Foreign media reports said the US was considering new curbs on exports of advanced artificial intelligence chips to China. Hua Hong Semiconductor slipped 1.4 per cent to HK$23.75.
The Hang Seng Index has risen about 5 per cent so far this month, on track to end a two-month losing streak. China cut some policy rates this month, stoking speculation about more easing measures to revive home sales and boost liquidity for property developers. The benchmark remained lower than the level on March 31.
"We expect a tactical recovery in China on further policy accommodation," Goldman Sachs said in a note to clients. China's fundamental outlook has dimmed but much of this deterioration has been priced in, they added.
The speculation appear to be premature for now, as policymakers took a slow and easy approach. Many analysts are counting on a delayed stock upside in the fourth quarter. Goldman, HSBC and Bank of America continued to predict more accommodative measures in the coming months to spark a revival.
While China's growth is expected to quicken in the second half, Premier Li Qiang did not signal more stimulus in store when he spoke at the World Economic Forum in Tianjin on Tuesday. Beijing's timid stimulus so far could lead to policy errors, contributing to a sharp discount in the nation's stocks relative to equities in Japan and India, Alpine Macro said.
China earlier this month injected more liquidity and lowered loan prime rates tied to home mortgages to help lift confidence in the economy. Official reports showed manufacturing contracted and consumer spending limped last month, hobbling the nation's economic recovery.
Major Asian markets were mixed. The Nikkei 225 in Japan jumped 2.2 per cent while the S&P/ASX 200 in Australia advanced 1.1 per cent. The Kospi in South Korea lost 0.7 per cent.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.
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