Hong Kong stocks closed lower on Monday. The Hang Seng Index (HSI) fell 1.3%, while the Hang Seng Tech Index (HSTECH) decreased 2.5%.
In terms of star stocks, Hua Hong Semi, Baidu fell 6%; Kuaishou, Alibaba, SMIC fell 4%; Xiaomi, BYD fell 3%; Nio, Tencent, JD.com fell 2%.
China’s retail sales rose 1.3 per cent from a year ago in November, data from the National Bureau of Statistics showed. That was the weakest pace since December 2022, when China lifted all Covid-19-related restrictions. The figure also trailed a consensus estimate for a 2.9 per cent increase.
Industrial production climbed 4.8 per cent last month, while fixed-asset investment contracted 2.6 per cent in the January-to-November period. Both figures fell short of projections. A separate report by the bureau showed that the decline in home prices continued apace last month.
“Economic activity indicators weakened across the board in November,” said Zhang Zhiwei, chief economist at Pinpoint Asset Management in Hong Kong. “The soft retail sales number is particularly worth noting. The contraction in fixed-asset investment and the drop in property prices in recent months have mirrored weakening consumer sentiment. I expect fiscal and monetary policies to be loosened somewhat in the first quarter to stabilise the economic momentum.”
The deteriorating growth outlook could risk derailing a solid rally in Hong Kong stocks this year, which has been propelled by a re-evaluation of Chinese technology stocks and a de-escalation in trade tensions between Beijing and Washington.
At last week’s annual Central Economic Work Conference, chaired by President Xi Jinping, policymakers pledged to prioritise boosting domestic demand next year and signalled a continuation of expansionary fiscal and accommodative monetary policies.
The bigger-than-expected decline in retail sales was mainly due to falling car sales and the front-loading of the November 11 Singles’ Day online shopping gala, which brought forward some of the sales to October, according to Goldman Sachs.
Weakening retail spending was more about confidence that was undermined by the prolonged slump in home prices, according to Zavier Wong, an analyst at eToro, a global stock trading platform.
“The property sector in China may no longer be in a free fall, but it remains a persistent drag on sentiment,” he said. “That matters beyond just property developers. For many households, property remains the main store of wealth, and when prices and activity feel uncertain, spending decisions naturally get pushed back.”
