Hong Kong stocks rocked by volatility as investors await China policy easing

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Goldman Sachs said this week’s cuts echoed China’ concerns about weak domestic demand and added that it expects more policy easing to boost demand

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Hong Kong Stock Exchange in Central. Photo: Jonathan Wong

Zhang Shidongin Shanghai

Published: 10:37am, 26 Jul 2024Updated: 4:37pm, 26 Jul 2024

Hong Kong stocks were rocked by volatility on Friday with the benchmark teetering between positive and negative territory and nervous investors awaited more policy easing measures after the country’s central bank unexpectedly cut key benchmark rates this week.

The Hang Seng Index added 0.1 per cent to 17,021.31 at the close after falling as much as 0.5 per cent and rising 1.3 per cent to an intra day high. Still, the benchmark posted a 2.3 per cent weekly loss, the second consecutive down week. The Hang Seng Tech Index gained 0.7 per cent, while the Shanghai Composite Index added 0.1 per cent.

E-commerce operator JD.com advanced 3 per cent to HK$102.30 and electric-vehicle maker BYD added 0.7 per cent to HK$235.80. Losers included China Unicom which sank 4.2 per cent to HK$6.83 and online travel agency Trip.com Group which lost 2.2 per cent to HK$340. Live-streaming commerce operator East Buy Holding tumbled 23 per cent to HK$9.50 after its top influencer left the company to start his own business.

Investors now await a Politburo meeting, expected to be held later this month, for clues as to how President Xi Jinping will fix economic issues like a home sales slump and weak consumer spending.

“The economic fundamentals don’t lend too much support to the market and the key is to watch how the policy will change and how it will be implemented,” said Song Yiwei, an analyst at Bohai Securities in Tianjin. “If the key Politburo meeting delivers signals of stabilising growth, there’s a chance that the market will continue to recover. Otherwise, trading and sentiment will be sluggish.”