Hong Kong Stocks Slip First Time in Three Days Before China Data

Hong Kong stocks slipped, with the benchmark index falling for the first time in three days, before the release of Chinese data this week from January inflation and trade to new yuan loans and money supply.

The Hang Seng Index (HSI) slid 0.1 percent to 21,608.81 as of 9:45 a.m. in Hong Kong, after dropping 1.8 percent last week to cap a third weekly decline. The Hang Seng China Enterprises Index (HSCEI) of mainland Chinese companies, known as the H-share index, added 0.3 percent to 9,674.84.

Hong Kong’s benchmark index entered a so-called correction last week after falling more than 10 percent from a peak in December as manufacturing reports from China to the U.S. disappointed investors. The gauge slid 7.2 percent this year through last week, the worst performer after Japan’s Nikkei 225 Stock Average among 24 developed markets tracked by Bloomberg.

China may report as early as today new yuan loans climbed to 1.1 trillion yuan ($181 billion) in January from 482.5 billion yuan the previous month, according to economist estimates surveyed by Bloomberg.

Data on aggregate financing and money supply are also scheduled to be published this week, with no fixed date for their release. A report on January trade is due Feb. 12, before inflation data on Feb. 14.

China’s central bank signaled that volatility in money-market interest rates will persist and borrowing costs will rise, underscoring the risk of defaults that could weigh on confidence and drag down growth.

Rates Rise

“When the valve of liquidity starts to tame and curb excessive credit expansion, money-market rates, or the cost of liquidity, will reflect that,” the People’s Bank of China said in Feb. 8 report. “The market needs to tolerate reasonable rate changes so that rates can be effective in allocating resources and modifying the behavior of market players.”

Futures on the Standard & Poor’s 500 Index fell 0.1 percent today. The gauge climbed 1.3 percent on Feb. 7 amid optimism economic growth is robust enough to weather stimulus cuts even as data showed weaker-than-forecast hiring.

Reports last week showed payrolls rose 113,000 in January, less than the 180,000 advance projected in a Bloomberg survey of economists. The unemployment rate unexpectedly declined to 6.6 percent, the lowest level since October 2008.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net

To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net

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