Some Wall Street banks trim their GDP forecasts after growth last quarter trailed market consensus
Beijing has refrained from unleashing big stimulus measures amid concerns about debt, fiscal overreach
A woman walks past a screen displaying the Hang Seng Index outside the Exchange Square in Central, Hong Kong in March 2023. Photo: Reuters
Hong Kong stocks fell as China showed no urgency in reflating the economy with growth lagging market expectations, prompting some Wall Street banks to lower their targets again.
The Hang Seng Index slid 1.6 per cent to 19,101.26 as of 10.30am local time, from Friday’s level. Stocks and futures were halted on Monday on typhoon warning. The Tech Index declined 1.6 per cent while the Shanghai Composite Index slipped 0.5 per cent.
Alibaba Group declined 2.8 per cent to HK$90.35, e-commerce rival JD.com slumped 3.9 per cent to HK$144.70, and Tencent dropped 2.7 per cent to HK$343.20. Property developer Longfor sank 6.4 per cent to HK$16.06 and peer Country Garden tumbled 4.7 per cent to HK$1.43. Macau casino operator Sands China weakened 0.7 per cent to HK$28.60 and peer Galaxy Entertainment lost 1.3 per cent to HK$53.75.
China’s GDP grew at an annual pace of 6.3 per cent last quarter, trailing consensus forecast for 7.1 per cent gain. Beijing’s 2023 target of “around 5 per cent” is now under threat from weak consumer confidence, a struggling housing market, and record youth unemployment, analysts said.
“We do not think [the GDP] data will prompt Beijing to step up stimulus measures,” Nomura analysts including Ting Lu wrote in a note. Growth will ease further in the second half and Beijing’s supportive measures will be “far from enough” to turn the economy around, they said.
Morgan Stanley, JPMorgan Chase and Citigroup trimmed their growth forecasts for China’s GDP this year to 5 per cent, according to Bloomberg data.
Two stocks debuted in Hong Kong today. ZhongAn Intelligent Living Service slumped 5 per cent to HK$1.12, while New Media Lab climbed 1.1 per cent to 93 HK cents.
Major Asian markets were mixed on Tuesday. The Kospi Index in Korea and the S&P/ASX 200 Index in Australia both declined 0.2 per cent, while the Nikkei 225 Index in Japan jumped 0.9 per cent.