Hong Kong stocks slide on bond market scare, China offers mixed bag of plans to support growth

Stocks extended losses in line with a global sell-off, as the Federal Reserve stopped short of unveiling measures to tame rising bond yields

China kicked off ‘two sessions’ meeting in Beijing with a ‘super low’ GDP target, restrained stimulus and caution on property market

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Losses in US stock and bond markets are guiding markets in Asia lower as traders turn uneasy about the inflation outlook and policy tightening risks. Photo: Bloomberg

Published: 11:03am, 5 Mar 2021Updated: 5:15pm, 5 Mar 2021

Hong Kong and China’s stocks both dropped for a second day, extending losses from a sell-off in global equities, as the Federal Reserve stopped short of moves to stem rising bond yields. China kicked off the “two sessions” meeting with a mixed bag of targeted stimulus and policy squeeze.

The Hang Seng Index slipped 0.5 per cent to 29,098.29 at the close, trimming the weekly advance to 0.4 per cent. The CSI 300 Index of biggest companies in Shanghai and Shenzhen bourses fell 0.3 per cent, while futures on US and European equities signaled deepening losses in cash markets.

Technology stocks bore the brunt of selling, with smartphone maker Xiaomi and Techtronic Industries retreating by at least 3 per cent. PetroChina added 3.2 per cent after OPEC announced plans to keep output unchanged.

The National People’s Congress, or China’s annual legislative meeting, opened in Beijing. In a work report delivered by Premier Li Keqiang, China set a “super low” threshold on economic growth for 2021 at above 6 per cent, which trailed most economists’ bullish estimates of more than 8 per cent. China also curtained its budget deficit to 3.2 per cent from 3.6 per cent a year ago. (Follow the SCMP live blog here.)

“Policymakers may opt for gradual policy normalisation during this year. The government and central bank are expected to maintain some targeted measures to support the small- and medium-sized enterprises and technological sectors,” said Zhu Chaoping, a strategist in Shanghai at JPMorgan Asset Management. “We remain constructive about the growth prospect of China.”