6th December 2023 – (Hong Kong) Hong Kong stocks wavered at the market open, with the Hang Seng Index dropping 15 points to 16,311. The State-owned Enterprises Index (SOE Index) opened higher by 2 points, standing at 5,611, while the Technology Index rose by 8 points to 3,691. However, by 1205pm, the Hang Seng Index rebounded, reaching 16,447.76, marking an increase of 119.90 points or 0.73%.
Large technology stocks displayed a mixed bag of performances. Tencent and Alibaba were down by 0.7%, while Meituan saw a slight dip of 0.1%. Both JD Group and Ctrip showed no change at market open, while Xiaomi Group registered a 0.6% increase.
On the financial front, HSBC Holdings rose by 0.6%. China Ping An, Industrial and Commercial Bank of China, and Bank of China each climbed by 0.3%. Hong Kong Exchanges and Clearing and China Merchants Bank remained unchanged, while China Construction Bank fell by 0.2%. AIA Group was down by 2.4%, pulling down the broader market.
Meanwhile, in China, blue-chip stocks hit an almost five-year low on Wednesday, and the Chinese yuan extended its losses. Market sentiment remains fragile following Moody’s decision to downgrade China’s credit outlook on Tuesday. The agency expressed concern about the costs associated with bailing out local governments and state firms and managing its property crisis, which may have a significant impact on the world’s second-largest economy.
Chinese stocks began the day in negative territory before shedding earlier losses, with the CSI300 Index reaching its lowest point since February 2019. The Hang Seng Index, however, saw a rebound of approximately 0.6% in morning trade.
“The CSI300 index suffered the most in terms of valuation, as the index receives more allocations from foreign investors. Coupled with the impact of Moody’s downgrade, the index may find a bottom and rebound soon,” said Pang Xichun, Research Director at Nanjing RiskHunt Investment Management Co.
Despite three consecutive sessions of outflows, foreign capital recorded a net inflow via the northbound trading link as of midday.
The yuan slipped against the dollar on Wednesday, even as major state-owned banks continued to strive to stabilise the currency. The spot yuan opened at 7.1570 per dollar and was trading at 7.1567 as of 02:55 GMT, 87 pips weaker than the previous late-session close.
Major state-owned banks in China increased their selling of U.S. dollars following Moody’s statement on Tuesday, and they continued this trend on Wednesday morning, according to Reuters.
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