Hong Kong Stocks Swing Between Gains, Losses on China
Hong Kong stocks swung between gains and losses after China signaled it will tolerate slower growth and reduce reliance on government investment. Kingsoft Corp. surged after posting improved earnings.
Jiangxi Copper Co. (358), China’s biggest producer of the metal, slid 1.3 percent. 361 Degrees International Ltd. sank 9.1 after the sportswear manufacturer projected a drop in first-half profit. Kingsoft jumped 13 percent after the software maker posted higher earnings. Weichai Power Co. gained 3.7 percent after the maker of diesel engines signed an agreement to increase its stake in Germany’s Kion Group.
The Hang Seng Index (HSI) fell less than 0.1 percent to 22,605.60 as of 10:50 a.m. in Hong Kong after rising as much as 0.2 percent. Volume was 41 percent below the 30-day intraday average. The benchmark index retreated 2 percent last week amid growing speculation the Federal Reserve will reduce its bond purchases as the economy improves and after preliminary Chinese manufacturing data showed an unexpected contraction.
“Most investors are staying on the sidelines given ongoing concerns about China,” said Jackson Wong, vice president of Hong Kong-based brokerage Tanrich Securities Co. “The general consensus is for slower growth in China. The market has been used to seeing high growth in China but the new leaders want better quality and more sustainable growth.”
The Hang Seng China Enterprises Index of mainland companies slipped 0.1 percent. China’s President Xi Jinping signaled a tolerance for slower expansion to avoid environmental degradation as policy makers outlined plans for the private sector to take a bigger role in boosting growth.
Futures on the Hang Seng Index lost 0.1 percent 22,566. The HSI Volatility Index slid 0.3 percent to 17.44, indicating traders expect a swing of 5 percent for the equity benchmark in the next 30 days.
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