Hong Kong stocks declined from a three-month high on concerns the run-up may be overdone amid debates about the strength of economic recovery in China and the US.
The Hang Seng Index retreated 0.6 per cent to 29,297.62 at the close. The benchmark on Tuesday reached the highest level since March 3, as it attempted to break out from a 200-point trading band. China’s Shanghai Composite Index slid 0.8 per cent.
Chinese technology stocks that rallied hard earlier this week surrendered some of their gains as the Hang Seng Tech Index lost almost 1 per cent. Meituan dropped 0.4 per cent to HK$311.80, halting an 18 per cent rally in the previous two days.
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Alibaba Group Holding, the owner of this newspaper, sank 1.7 per cent to HK$214.40 while its unit Alibaba Health Information Technology lost 1.6 per cent to HK$19.40. WuXi Biologics tumbled 3.8 per cent to HK$120.90.
Traders are looking for fresh catalysts that can help further propel the Hang Seng Index after the gauge’s 55 members added US$53.3 billion in market value in April and May, amid tentative signs of recovery momentum in mainland China and Hong Kong economy and the risks of inflation and policy tightening.
“There’s an increasing chance that Hong Kong stocks will be due for a correction in June to follow the trend on US stocks,” said Cheng Jiawei, an analyst at Guosen Securities. A market pullback may be in store, given concerns about Fed tapering and higher interest rates, he added.
The S&P 500 index and the Nasdaq composite index both slipped 0.1 per cent in overnight trading. US manufacturing activity picked up in May, the Institute for Supply Management said on Tuesday, beating estimates. Federal Reserve Governor Lael Brainard said there are risks on both sides of monetary policy as the economy surges ahead while millions of people are unemployed.
US non-farm payrolls report is due on Friday, which will shed light on how resilient the recovery at the world’s largest economy from the pandemic. China is also expected to release a raft of economic data for May in the coming weeks after two purchasing managers’ indexes showed a mixed picture of the manufacturing industry.
Evergrande Property Services Group tumbled by a record 13 per cent to HK$9.78 for its lowest close since January, after an unidentified seller placed out 270 million shares at a 12 per cent discount, after a six-month lock-up period expired on Tuesday.
Next Digital, publisher of the Apple Daily in Hong Kong, jumped 67 per cent to HK$0.355. The city’s national security arm on Tuesday blocked jailed founder Jimmy Lai Chee-ying from exercising the voting power on the media tycoon’s 71 per cent stake after earlier freezing his assets.
Two companies made their debuts on the Shenzhen exchange, rising by at least six folds from the initial public offering prices. Ningbo Fangzheng Automobile Mould surged 644 per cent to 44.80 yuan and Huanlejia Food Group, a drink maker, jumped 528 per cent to 31 yuan.
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