Hong Kong stocks recover from lows struck on policy support despair

The Hang Seng Index is down almost a tenth from this year’s high set last month, as investors took profits amid lack of significant policy support

Reading Time:2 minutes

The photo taken on January 10, 2024 shows electric cars for export waiting to be loaded on the at Yantai port, in eastern China’s Shandong province. Concerns about the geopolitical tensions still lingered even as China and the European Union agreed to start talks on the imposition of the tariffs on Chinese electric vehicles. Photo: AFP

Published: 10:39am, 24 Jun 2024Updated: 5:28pm, 24 Jun 2024

Hong Kong stocks finished almost unchanged after briefly dropping to their lowest levels in almost two months, as the lack of fresh supportive measures and lacklustre economic data sparked investor jitters.

The Hang Seng Index slipped ended almost unchanged after falling as much as 1.3 per cent. The Hang Seng Tech Index sank 0.7 per cent and the Shanghai Composite Index retreated 1.2 per cent, set to close below the 3,000-point mark for a second straight day.

Hotpot chain restaurant operator Haidilao International Holding was a prominent decliner after its decision to replace its chief executive officer triggered leadership uncertainties. Tempering losses, Li Auto and BYD rebounded after China and the European Union agreed to start talks on the plan to impose tariffs on Chinese electric vehicles.

In the latest negative sign for the world’s second largest economy, foreign direct investment in China dropped 28.2 per cent in the January-to-May period from a year ago, worsening from a 27.9 per cent decline in the previous four months, according to the official data released on Friday night.

“There’s no catalyst now and valuations are fair,” said Wang Xueheng, an analyst at Guosen Securities. “We recommend investors not take any action for now. If the index falls around the 17,200 level, investors can consider some opportunity of bottom-fishing.”

The Hang Seng Index is now down more 8 per cent from 2024’s peak struck last month, as investors took profits with economic fundamentals lagging. The May economic data set showed China’s economic recovery was patchy, while a high-profile financial gathering attended by top officials from the central bank and the stock-market regulator unveiled only piecemeal measures of support.