Most Hong Kong stocks trimmed losses as buyers picked up beaten-down tech companies. Concerns about the Federal Reserve policy tightening drive and China lockdown worries earlier tipped global equities into bear market.
The Hang Seng Index was little changed at 21,067.99 at the close of Tuesday trading, halting a three-day slide. The index earlier lost as much as 1.7 per cent. The Tech Index fell less than 0.1 per cent, while the Shanghai Composite Index added 1 per cent. Benchmarks in major Asia-Pacific markets lost by 0.5 per cent to 3.6 per cent.
Losers still outnumbered gainers. Alibaba Group Holding, the owner of this newspaper, fell 2.5 per cent to HK$101.20 while AIA Group dropped 0.6 per cent to HK$78.60 and Tencent Holdings lost 0.3 per cent to HK$376. All of them pared steeper declines during the day.
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Overnight losses in US equities of about 4 per cent had earlier pushed the MSCI All-Country World Index to below 600 points, capping a more than 20 per cent retreat from its mid-November peak, a magnitude commonly defined as a technical bear market.
“The [US] inflation data has raised market expectations that the Fed could hike by more than 50 basis points this week, and opt for a 75 basis points increase instead,” said Tai Hui, chief market strategist at JPMorgan Asset Management in Hong Kong. “Slamming on the brakes too hard risks pushing the economy off its track.”
The Fed holds its open-market committee meeting this week, and is poised to raise its target rate for a third time in the lift off. A government report on Friday showed US inflation re-accelerated in May by 8.6 per cent, the fastest since 1981.
Most stocks in Hong Kong traded off their lows, as investors deemed the sell-off as excessive, according to Banny Lam, managing director and head of research at CEB International Investment in Hong Kong. There was “a little overshooting to the downside and now markets think it is inexpensive.”
Elsewhere, concerns about further lockdowns in China continued to pressure sentiment. Beijing recorded 74 cases on Monday, a three-week high, as the government urged local authorities to contain the outbreak as soon as possible, Xinhua News Agency reported.
Hong Kong’s government imposed new measures to control another potential outbreak, after logging 752 new cases on Tuesday, after topping 800 in each of the past two days. For two week through June 29, all patrons will be required to submit rapid test results before entering bars, pubs or nightclubs, it said.
In Shenzhen, Sichuan Qiaoyuan Gas soared 71 per cent to 28.98 yuan on its first day of trading, while Audiowell Electronics (Guangdong) Company fell 7.5 per cent to 10.18 yuan in Beijing.
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