Hong Kong stocks surrender gains on China growth concerns as Japan market recoups losses

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Local stocks failed to hold onto early gains after a global panic sell-off, while Japan’s Nikkei 225 Average clawed its way out of a bear market

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Electronic boards showing the Hang Seng Index and stock prices outside the Exchange Square in Central. Photo: Sun Yeung

Zhang Shidongin Shanghai

Published: 10:30am, 6 Aug 2024Updated: 5:09pm, 6 Aug 2024

Hong Kong stocks surrendered gains to trade at a three-month low amid renewed concerns about China’s economic recovery, as a global market sell-off eased with Japanese equities clawing their way out of a bear market.

The Hang Seng Index dropped 0.3 per cent to 16,647.34 at the close of Tuesday trading, erasing a rally of as much as 1.3 per cent. The Tech Index gained 0.1 per cent while the Shanghai Composite Index added 0.2 per cent. Major gauges in the region rose, with South Korea’s Kospi advancing 3.3 per cent and Australia’s S&P/ASX 200 adding 0.4 per cent.

China Life Insurance slumped 4.5 per cent to HK$10.10, Macau casino operator Sands China sank 4 per cent to HK$14.30 and online game operator NetEase retreated 2.5 per cent to HK$134.10. Limiting losses, Alibaba Group Holding added 1.4 per cent to HK$75.25 and e-commerce rival JD.com rose 0.8 per cent to HK$97.70.

Japan’s Nikkei 225 surged 10.2 per cent, recouping most of the worst slump on record when it plunged 12 per cent on Monday. The yen, which strengthened after a rate hike and triggered the crash, reversed a five-day rally against the US dollar. The VIX Index, Wall Street’s fear indicator, surged by the most since 1990 this week, according to Bloomberg data.

A man walks in front of an electronic board displaying the Nikkei 225 Index on August 6. Photo: AFP

“Selling pressure is easing and the downside will be limited here, barring a major deterioration in global macro conditions,” said Jason Chan, senior investment strategist at Bank of East Asia. “But don’t expect to see much upward momentum as China’s fundamentals are still weak.”