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Hong Kong stock market
BusinessChina Business

China Unicom, Trip.com help Hong Kong stocks post late rally, but index still near 3-week low

  • Biden administration imposes limits on US investments in China aimed at restricting China’s access to technologies that could undermine US national security
  • Alibaba closes higher ahead of its quarterly earnings report card due later today

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US President Joe Biden has signed an executive order further restricting American investment in China in technologies that might pose national security risks. Photo: Reuters
Zhang Shidongin Shanghai
Hong Kong stocks traded close to the lowest level in three weeks after Washington’s new measures on restricting investments in China rekindled concerns about geopolitical risks. China Unicom’s strong earnings and China’s lifting of a ban on group travel to the US offset some pessimism.
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The Hang Seng Index rose less 0.1 per cent to 19,248.26 at the close after erasing a loss of as much as 1.1 per cent. Still, the benchmark traded near the lowest close since July 24. The Hang Seng Tech Index gained 0.1 per cent, while the Shanghai Composite Index added 0.3 per cent.

China Unicom advanced by the most in four weeks after reporting a 14 per cent increase in first-half profit and Trip.com Group climbed after China resumed group travel to the US and Japan. Alibaba Group Holding gained before its earnings release later on Thursday. Chinese property developers Country Garden Holdings and Longfor Group Holdings extended declines amid sell-offs on fears about their financial health and debt-servicing capability.

The Biden administration unveiled plans on Wednesday to impose restrictions on US investments in China in semiconductors and micro electronics, quantum information technologies and certain artificial intelligence systems. President Joe Biden named China as he declared a national emergency to deal with threats from countries with technology advancement.

“The strained ties between China and the US have now become a long-standing overhang on the market,” said Dai Ming, a fund manager at Huichen Asset Management in Shanghai. “As long as the issue remains unsolved, the risk appetite will definitely be subdued on the broader market.”

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The resurgence of the geopolitical risk adds to investors’ worries over the waning growth momentum in China. Exports fell by the most in three years in July and both consumer and producer prices slid into deflationary territory.

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