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Hong Kong stocks edged higher before the release of key economic data from the US and China that will shape the outlook for monetary policies and show the magnitude of the recovery in the mainland economy.
The Hang Seng Index rose 0.3 per cent to 19,286.07 at the close in narrow-range trading. The Hang Seng Tech Index also added 0.3 per cent. In China, the CSI 300 Index slipped 0.6 per cent, and the Shanghai Composite Index retreated 0.4 per cent.
China Merchants Bank advanced more than 3 per cent after posting profit growth last year, and Semiconductor Manufacturing International Corp (SMIC) rallied on expectations that US tech curbs will lead China to push ahead with its self-reliance strategy. Gold producer Zijin Mining Group tumbled after it was added to a US blacklist for alleged forced labour linked to the Uygur ethnic minority.
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All eyes will be on the US December inflation data due on Wednesday night after the blowout jobs data last week slashed bets for the Federal Reserve to reduce interest rates. Consumer prices probably grew 2.9 per cent, accelerating from the 2.7 per cent increase in the previous month, according to economist estimates tracked by Bloomberg.
Meanwhile, China is scheduled to disclose data on fourth-quarter economic growth on Friday. Expansion probably quickened to 5 per cent from 4.6 per cent in the previous three-month period, the projection showed.
“On the positive side, China’s economy is showing signs of gradual improvement after the enforcement of the stimulus package,” said Yang Chao, a strategist at China Galaxy Securities in Beijing. “On the other hand, investors’ risk appetite is on the decline because of the external uncertainty, such as the US policies on China after the inauguration of Trump. Stocks are likely to be rangebound.”
Both Hong Kong and Chinese stocks are off with a wobbly start to 2025 on renewed concerns about the durability of China’s economic recovery and elevated tensions between Beijing and Washington. Even though, some global investment banks believe that the worst for Chinese stocks is already behind it, with UBS Group, Goldman Sachs and HSBC Holdings predicting annual gains in equities on stimulus policy.
China Merchants Bank advanced 3.3 per cent to HK$41.20 after it said that 2024 profit rose 1.2 per cent from a year earlier. SMIC jumped 6 per cent to HK$37.20. Zijin Mining slumped 5.9 per cent to HK$14.48.
UBTech Robotics, a Chinese manufacturer of humanoid robots, jumped 9.2 per cent to HK$52 after it said it would foster a long-term partnership with Foxconn on the application of its products.
Separately, Country Garden Holdings, the indebted Chinese property developer, reported a loss of 12.8 billion yuan (US$1.75 billion) for the first half of 2024 and a record loss of 178.4 billion yuan in 2023. The stock has remained suspended since March.
Three companies started trading. Beijing Saimo Technology, which develops simulation and validation tools, rose 1.5 per cent from the offer price to HK$13.18 in Hong Kong. In China, Scantech, which makes three-dimensional visual digital products, surged 199 per cent to 100 yuan, and chemical firm Yangzhou Huitong Technology soared 302 per cent to 47.40 yuan.
Other major Asian markets mostly finished lower. Japan’s Nikkei 225 added 0.1 per cent and Australia’s S&P/ASX 200 lost 0.2 cent, while South Korea’s Kospi was little changed.
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