Hong Kong market flirts with bear territory as China manufacturing decline erodes investor faith in economic recovery
- The Hang Seng Index fell but avoided ending the day in bear-market territory
- China’s official manufacturing index declined to 48.8 in May from 49.2 in April, the statistics bureau said on Wednesday
The Hang Seng Index finished down 1.9 per cent to 18,234.27 at the close of Wednesday trading after tumbling as much as 3 per cent during the day. The gauge has declined 19.6 per cent from a January 27 high, just shy of the 20 per cent threshold for bear-market status. The Tech Index retreated 2 per cent, while the Shanghai Composite Index lost 0.6 per cent.
Gaming giant NetEase tumbled 4.9 per cent to HK$132.60, food-delivery platform Meituan fell 5.3 per cent to HK$110.20 and JD.com lost 3.2 per cent to HK$125.90. Property developer Longfor slipped 3.7 per cent to HK$15.06 while peer Country Garden retreated 3.4 per cent to HK$1.44. China’s big three oil giants – PetroChina, Sinopec and CNOOC – slumped by 3.1 to 5.4 per cent on economy worries.
“The problem is [the recovery] is weaker than expected, meaning the market would need to adjust its assessment,” said Gary Ng, senior economist at Natixis. Global high interest rates and a destocking cycle continue to hit demand, and the pace of the services sector’s recovery is also slowing, showing signs of fatigue, he said.
