Hong Kong stocks wavered as Chinese tech leaders including Alibaba Group and Baidu retreated from overheated levels following rapid gains in the new year. An official report showed inflation quickened in China, hurting policy-easing outlook.
The Hang Seng Index rose 0.4% to 21,514.10 at the close of Thursday trading, after swinging between gains and losses during the day.
Tech Index Falls The Tech Index fell 1.3%, and its three-day decline of almost 2% was the worst in two months. The Shanghai Composite Index slipped 0.2%. Alibaba lost 1.9% to HK$110.80 and Tencent Holdings retreated 2.6% to HK$364 while Baidu eased 0.9% to HK$132.60. Like the Hang Seng barometer, their relative strength index readings surpassed 70 points this week, suggesting a pullback was imminent.
Fund Manager’s View “In the short run, most of the tailwinds have been factored into stock prices,” said Cheng Yu, a fund manager at HSBC Jintrust Fund Management in Shanghai. “Hong Kong’s market will most probably be in for wild swings” given the massive gains so far this year, he added.
Gains in the Auto Sector Limiting losses, China’s top-selling carmaker BYD surged 5.2% to HK$228.40 while rival Geely Auto jumped 1.8% to HK$12.24 and Nio added 0.6% to HK$89.20. All three, however, pared gains. Oil explorer PetroChina gained 3.9% to HK3.75 as crude prices logged best winning run since October on demand outlook.
Stocks in Hong Kong and mainland China have added more than almost US$900 billion in capitalization this year as global funds chased China reopening beneficiaries. Beijing started dismantling its zero-Covid regimen in November and officially abandoned the policy when it scrapped quarantines for arrivals on January 8.
Chinese manufacturers continue to lose pricing power while economic recovery takes time. Producer prices dropped 0.7% in December from a year earlier, after falling 1.3% in November, the statistics bureau said. Consumer prices increased 1.8% versus 1.6% in November, it added.
U.S Inflation Data
Elsewhere, the U.S government will report December inflation data later Thursday. Prices probably rose 6.5%, easing from a 7.1% gain in November, according to JPMorgan Chase.
New Company in Hong Kong
One company started trading in Hong Kong. Beijing Sinohytec, a manufacturer that produces hydrogen fuel cell engines for vehicles, closed unchanged at HK$60 after losing as much as 2.6% to HK$58.45.