The Hang Seng Index fell 1 per cent to 15,544.90 at 10.55am local time, taking the decline for the month to 8.8 per cent, the worst since a 9.4 per cent slump in February last year. The Tech Index dropped 2.2 per cent and the Shanghai Composite Index retreated 0.8 per cent.
This month’s setback is also the local market’s worst start to a year since January 2016 when the Hang Seng Index lost 10 per cent.
“Seasonality cannot explain the weakness of the manufacturing industry and policy support is still needed to boost effective demand,” said Bruce Pang, chief economist at Jones Lang LaSalle in Hong Kong. Weak consumer and producer prices may support the case for rate cuts in China, he added.
Citigroup, HSBC trim Hang Seng Index targets on earnings, China policy doubts
Citigroup, HSBC trim Hang Seng Index targets on earnings, China policy doubts
Beijing’s piecemeal support measures and the renewed geopolitical risks ahead of the US presidential elections this year, coupled with the shock from the liquidation of China Evergrande Group, are clouding China’s recovery outlook, analysts said.
Meanwhile, Sunny Optical, which makes camera lenses for iPhones, plunged 8.3 per cent to HK$49.50. It said net income for 2023 likely fell as much as 55 per cent because of falling product prices and shrinking margins amid weak demand and stiffer competition.
Hong Kong property prices hit lowest since January 2017 on high interest rates
Hong Kong property prices hit lowest since January 2017 on high interest rates
Market also weakened as traders bet the Fed will hold rates unchanged at its first policy meeting of the year later today, based on 98 per cent odds priced in Fed fund futures. The decision will offer no immediate relief for Hong Kong’s real estate market, which has suffered from rate increases since March 2022.
Other major Asian markets were mixed. Japan’s Nikkei 225 slipped 0.8 per cent and South Korea’s Kospi retreated 0.1 per cent, while Australia’s S&P/ASX 200 added 0.3 per cent.