Hong Kong stocks slip for fifth day on Longfor, Alibaba losses amid weak China recovery signals while BYD, HSBC advance

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Hong Kong stocks fell for a fifth day in its worst losing streak in three weeks amid weak recovery signals in China’s housing market, while BYD and Xpeng led EV makers higher and HSBC advanced on reports of higher lending rates.

The Hang Seng Index dropped 0.4 per cent to 18,025.89 at the close of Tuesday trading, capping a five-day, 4.3 per cent loss. The Tech Index declined 0.5 per cent while the Shanghai Composite Index retreated 0.2 per cent.

Longfor Group fell 2.2 per cent to HK$16.40 after contracted sales in August slumped 41 per cent from a year earlier, signalling no imminent turnaround in China’s housing market. Peer China Overseas Land and Investment shed 1.1 per cent to HK$16.54. Alibaba Group dropped 2 per cent to HK$86.30 and slipped 0.7 per cent to an all-time low of HK$124.70.

Limiting losses, BYD climbed 2.8 per cent to HK$254.80 and Xpeng added 1.5 per cent to HK$72.80, after sales of electric cars in China rose 27 per cent from a year ago in August. HSBC gained 0.5 per cent to HK$57.95 on speculation the lender has raised mortgage rates to overcome costlier interbank funds in Hong Kong.

“Markets should avoid jumping to conclusions [about a turnaround in the economy], because data can be easily distorted by base effects, seasonality, unsustainable pent-up demand or simply data quality issues,” said Lu Ting, chief China economist at Nomura The economy has yet to stabilise, and Beijing may need to introduce more aggressive easing measures, he said.


Can China learn lessons from Japan’s ‘lost 30 years’?

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Government reports later this week may show industrial production rose 3.9 per cent from a year earlier, versus a 3.7 per cent gain in July, according to economists tracked by Bloomberg. Retail sales probably grew 3 per cent from 2.5 per cent for the same period.


The small expected gains followed a mixed set of data in August. Credit supply and new lending surged last month, while external trade shrank and deflationary pressure persisted.
Elsewhere, Innovent Biologics, which produces drug candidates to treat cancer and other illnesses, slumped 6.5 per cent to HK$35.80, erasing US$492 million of market value. It hired Morgan Stanley to help sell 68 million new shares at HK$34.92 each, or 8.8 per cent below its price on Monday.

Other major Asian markets were mixed. Japan’s Nikkei 225 climbed 1 per cent, while South Korea’s Kospi retreated 0.8 per cent and Australia’s S&P/ASX 200 added 0.2 per cent.


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