China, Hong Kong stocks extend losses, focus on stimulus

HONG KONG: China and Hong stocks extended losses on Wednesday, with frail economic data continuing to weigh on sentiment as investors wait for meaningful stimulus as the next catalyst.

** China’s blue-chip CSI 300 Index dipped 0.42%, and the Shanghai Composite Index edged down 0.25%.

** Hong Kong’s Hang Seng Index dropped 1.23%, and Hang Seng China Enterprises Index fell 1.30%.

** China’s fiscal revenues grew 13.3% in the first six months of 2023 from a year earlier, slower than a 14.9% rise in the first five months, finance ministry data showed.

** “With one weak print after another, economic surprises in China have cratered, fueling calls for more than marginal policy stimulus,” BofA Securities said in its July Asia Fund Manager survey.

** According to the survey, an overwhelming 81% of participants were looking for monetary easing to kick in. Meanwhile, eight in 10 investors sided with a structural de-rating view for China equities.

** Yet some sell-side analysts are more positive. Hong Kong stocks’ valuations are still well below their five-year averages while the outlook for earnings growth in 2023 is good, HSBC analysts said in a note, expecting a turnaround of Hang Seng index in the second half of the year.

** Hang Seng Tech Index lost 1.7%, setting for a three-day losing streak.

** In mainland A-shares, photovoltaic firms dived 1.5% to lead the declines.