by Yulu Ao at scmp.com
Hong Kong stocks slipped amid concerns China’s policy stimulus will be too little too late to rejuvenate its post-pandemic economic recovery. While the Federal Reserve is certain to pause on its rate hikes, traders have since trimmed wagers on a rate cut in future meetings this year.
The Hang Seng Index dropped 0.6 per cent to 19,408.42 in Wednesday trading, after rising as much as 0.6 per cent to a three-week high. The Tech Index added 0.4 per cent, while the Shanghai Composite Index fell 0.1 per cent.
Bank of China (Hong Kong) lost 1.6 per cent to HK$3.11, while peer ICBC tumbled 2.4 per cent to HK$4.15 and China Merchants Bank fell 2.5 per cent to HK$36.75. Travel agency Trip.com slumped 5.2 per cent to HK$281.60 while Budweiser slipped 2.1 per cent to HK$21.25.
Limiting losses, Tencent added 0.2 per cent to HK$345.60, while Baidu advanced 1.4 per cent to HK$140 and EV maker Xpeng surged 4.5 per cent to HK$41.60.
Investors turned bullish this month amid speculation Beijing will take steps to shore up the floundering recovery. China on Tuesday cut the seven-day reverse repurchase rate to guide short-term rates, prompting Goldman Sachs and Nomura to predict a rate cut on Thursday.
“Reported optimism regarding Hong Kong equities seems unwarranted,” said Brock Silvers, chief investment officer at Kaiyuan Capital in Hong Kong. “China’s recovery seems to have stalled, and authorities are so far unwilling to mount an effective response, preferring a wait-and-see approach.”
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