Hong Kong stocks decline as traders await more China recovery signals, while fund warns of market pullback as Fed meets
- China’s official PMI manufacturing index rose to 50.1 in January, ending a three months of contraction, according to the statistics bureau
- Fund manager MegaTrust warns the market could drop by up to 18 per cent from its Lunar new Year high as fatigue sets in
The Hang Seng Index fell 1 per cent to 21,842.33 at the closing of Tuesday trading, after losing 2.9 per cent on Monday. The two-day slide narrowed January’s advance to about 10 per cent. The Tech Index retreated 0.8 per cent, while the Shanghai Composite Index lost 0.4 per cent.
Alibaba Group fell 2.3 per cent to HK$106.50, Tencent Holdings tumbled 2.9 per cent to HK$376 while JD.com lost 3.8 per cent to HK$228.40. Wuxi Biologics dropped 1.4 per cent to HK$66.05 and Sunny Optical Technology slipped 4.7 per cent to HK$104.40.
“The market has been running a bit hard in the short term,” said Willer Chen, senior analyst at Forsyth Barr Asia in Hong Kong. “Some stocks may not see much room for further gain before real fundamental recovery” is established, he added. “More proof of consumption and property recovery could boost investor confidence.”
The Fed holds its first policy meeting of the year this week and is likely to continue hiking this year to slow down inflation, despite expectations for a downshift in the size of increase among Wall Street analysts.
