Hong Kong stocks slide most in a month on soft China data, fading US rate cut bets
China’s October data points to a further slowdown this quarter, while a cloudy US rate cut outlook and frothy valuations dent sentiment
The Hang Seng Index closed 1.9 per cent lower at 26,572.46, capping the steepest decline since October 17. That trimmed the weekly gain to 1.3 per cent. The Hang Seng Tech Index dropped 2.8 per cent. On the mainland, the CSI 300 Index retreated 1.6 per cent and the Shanghai Composite Index shed 1 per cent.
Hong Kong stocks will be tested as investors shift their focus to economic data and company earnings, as a de-escalation in US-China tensions and an end to the US government shutdown has been fully digested by the market. Underwhelming macro data may jeopardise a run-up that has driven the Hang Seng Index 32 per cent higher this year.
A slew of data for October on Friday indicated that China’s economy softened further. While industrial production climbed 4.9 per cent last month from a year earlier, it missed the median estimate for a 5.5 per cent increase in a Bloomberg survey. The gain was also the smallest this year.
Retail sales rose 2.9 per cent, decelerating for a fifth straight month for the longest such streak since 2021. Fixed-asset investment shrank 1.7 per cent in the first 10 months of the year, a record for the period. Also, the downturn in China’s home prices deepened last month, exacerbating years of crisis.