Hong Kong and Chinese stocks traded sideways on Wednesday, as traders awaited a meeting by the US Federal Reserve to assess the prospects for monetary policy and economic growth.
The Hang Seng Index dropped less than 0.1 per cent, or 7.13 points, to 24,725.63 at the close after changing direction at least 10 times during the day. The Shanghai Composite Index lost 0.4 per cent to 3,283.92. China’s yuan strengthened 0.3 per cent to 6.7616 against the US dollar, extending its strongest level against the American currency in 16 months.
Caution prevailed in the two markets ahead of the Federal Open Market Committee meeting due on Wednesday US time. The Fed is expected to maintain its dovish stance after earlier saying that it will shift to a more relaxed approach on inflation. Meanwhile, US President Donald Trump said a vaccine for Covid-19 could be ready within four weeks.
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“We expect the Fed to reiterate its lower-for-longer call on rates, and to do whatever it takes on the liquidity front to support growth and unemployment,” said Jeffrey Halley, an analyst at Oanda in Singapore. “We may get some insight into the nuances of their new fuzzy inflation targeting process.”
China Mengniu Dairy and Bank of China were the biggest decliners on the Hang Seng Index on Wednesday, falling by at least 1.6 per cent.
Property developers advanced in Hong Kong after the city said it will further ease social distancing rules starting Friday, allowing bars, night clubs and swimming pools to reopen. China Resources Land rose 3.1 per cent to HK$36.70 for a third straight day of gains and Wharf Real Estate Investment climbed 2.6 per cent to HK$33.60.
The former British colony recorded nine new cases of Covid-19 – all traceable – on Wednesday. It had reported no new local infections a day earlier, the first time it had done so since early July, when a third wave of the epidemic rattled the city.
Fosun Tourism Group, a unit of Chinese conglomerate Fosun International Holdings, added 4.8 per cent to HK$8.13 after saying that it had relaunched Thomas Cook as an online-only travel business.
On the mainland, studio stocks gained after Chinese cinemas were allowed to open at 75 per cent of their capacity starting September 25, compared with the 50 per cent capacity allowed currently. Seven new films will be released in the coming eight-day National Day holiday, which starts on October 1. Zhejiang Talent Television & Film jumped 6.5 per cent to 9.23 yuan and Beijing HualuBaina Film & TV gained 1.8 per cent to 6.84 yuan.
All five debutants on the mainland’s exchanges surged on Wednesday. The best performer was Anhui Hyea Aromas, a maker of chemical products, whose shares jumped 394 per cent from their initial public offering price to 91.80 yuan on Shenzhen’s ChiNext board. Pony Testing International Group, which provides testing services from ecological environments to agricultural products, surged 149 per cent from its offer price to 110.90 yuan, making it the second-biggest gainer. Zhejiang Gongdong Medical Technology, a maker of medical equipment, surged by 44 per cent to 45.58 yuan on Shanghai’s main board, registering the smallest gain among the five companies.
Meanwhile, the World Trade Organisation (WTO) said on Tuesday that US tariffs on Chinese goods were in breach of international rules. While the ruling bolstered China’s position in the US-China trade war, it might have little binding effect. In December, US President Donald Trump blocked all new appointments to the WTO’s dispute resolution court, making it effectively non-functional.
This article Hong Kong and Chinese stocks fall slightly, as traders brace for US Fed meeting first appeared on South China Morning Post