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Hang Seng slips toward 20,000 level as Hong Kong denies property tax waiver, tech stocks slide amid lockdown, Taiwan risks
- Property stocks pared gains after finance chief denied comments by Exco official on plan to waive stamp duty on home purchases
- Sporadic lockdowns in China have dissipated all of the market recovery from Shanghai reopening, leaving market bulls frustrated
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Hong Kong stocks slipped toward a psychological level as Covid-19 lockdowns clouded earnings outlook for tech stocks amid ongoing cross-strait tensions. Property developers swung amid confusion over a tax waiver plan for home purchases.
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The Hang Seng Index fell 0.2 per cent to 20,003.44 at the close of Tuesday trading, after swinging between gains and losses by about 1 per cent. The Tech Index declined 0.9 per cent, while the Shanghai Composite Index added 0.3 per cent.
Meituan weakened 2 per cent to HK$176 and JD.com declined 3.7 per cent to HK$228.60. Sands China lost 0.7 per cent to HK$17.64 and Hong Kong Exchanges and Clearing fell 1 per cent to HK$352.40. Xiaomi slipped 0.2 per cent to HK$11.76.
Before today’s turnaround, Chinese stocks in onshore and Hong Kong stock exchanges have failed to kick on since the June reopening of Shanghai. Sporadic lockdowns in cities including Macau and southern Hainan province have upset economic forecasts and earnings recovery outlook, with the MSCI China Index losing all of its gains in July and August pullback.
China extended its military drills surrounding Taiwan after suggesting it would end on Sunday, pressuring the flow of tech products and chip parts as well as increasing risk along global shipping lanes.
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“The cross-strait tensions cast a long shadow over Chinese equities, adding to a growing list of negative headlines,” Alpine Macro said in a report. Still, China remains one of the most exciting growth stories and investors cannot ignore its economy and equities, it added.
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