A gauge of Chinese stocks listed in Hong Kong wiped out an initial advance, dragged down by property and consumer names, as trading resumed after the long weekend.
(Bloomberg) — A gauge of Chinese stocks listed in Hong Kong wiped out an initial advance, dragged down by property and consumer names, as trading resumed after the long weekend.
The Hang Seng China Enterprises Index erased a 2.1% gain to fall as much as 0.9% as traders assessed China’s shrinking manufacturing activity. Hong Kong’s benchmark Hang Seng Index also fluctuated while onshore markets remain closed for a holiday.
An unexpected contraction in manufacturing in April indicates China’s economy may be struggling to sustain growth momentum, although initial data from the Golden Week holiday showed upbeat travel, shopping and Macau casino figures. Payment misses by developers also muddied the outlook for the property sector amid some signs of continued recovery.
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“The consumer rebound is well known, but the latest PMI data shows the industrial sector may be losing steam,” said Marvin Chen, an analyst at Bloomberg Intelligence. “The uneven recovery and concerns on the sustainability of a consumption rebound” are causing the selloff, he added.
Equity investors have been getting frustrated as the second leg of China’s reopening rally continues to elude them. The HSCEI gauge posted a 3.8% loss in April as geopolitical tensions and an uneven economic recovery in China soured investor sentiment.
It has lost more than 10% since Jan. 31 — making it one of the worst performers among 92 global stock indexes tracked by Bloomberg. That’s after a surge of over 50% in the November to January period as the nation emerged from strict Covid-19 curbs.
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