A solid run for
Hong Kong stocks showed signs of slowing, as the city’s benchmark headed for a two-week low after the US Federal Reserve appeared resistant to an imminent interest rate cut and China’s manufacturing sector shrank unexpectedly.
The Hang Seng Index fell 1.1 per cent to 24,906.39 at the noon break on Thursday, poised for its lowest close since July 18. The Hang Seng Tech Index added 0.9 per cent. On the mainland, the CSI 300 Index slid 1.1 per cent and the Shanghai Composite Index retreated 0.7 per cent.
Biotech firm
Wuxi AppTec slumped 3.8 per cent to HK$107.80 after unveiling a share placement plan to raise HK$7.85 billion (US$1 billion). Gold producer Zijin Mining Group shed 4.9 per cent to HK$21.20 as the Fed’s decision on rates weighed on bullion prices. Meituan sank 3.9 per cent to HK$122.50 on media reports that major shareholder Prosus would trim its stake in the delivery-service provider. Chinese property developers slumped after the Politburo refrained from introducing additional measures to stabilise real estate prices.
Investors have shifted their attention to economic fundamentals and corporate results as the US has struck trade deals with most of its major partners. China released its purchasing managers’ index (PMI) for July and the corporate earnings season is underway, continuing through August.
The Hang Seng Index has risen 3.5 per cent this month, adding to a 24 per cent gain this year, as China-US tensions have eased and after better-than-expected economic growth was reported on the mainland in the first half.
US stocks gave up most of their gains and Treasury yields edged higher after the
Fed left its benchmark borrowing cost unchanged for a fifth meeting in a row. Chair Jerome Powell also resisted pressure from US President Donald Trump by saying that no decision was made about easing monetary policy in September. The probability of a September rate reduction dropped to 40 per cent from 70 per cent, according to Aberdeen Investments.
