SHANGHAI: China stocks dipped on Wednesday as many traders were reluctant to take fresh positions ahead of the long Labour Day holiday, while data showed new export orders plummeted due to aggressive US tariffs.
But the Hong Kong market rose slightly, aided by a jump in tech stocks, and a rebound in property shares.
China’s blue-chip CSI300 Index fell 0.1% while the Shanghai Composite Index closed down 0.2%.
Hong Kong’s Hang Seng Index rose 0.5% for the session, but dropped 5% in April - the biggest monthly fall in 16 months.
China’s factory activity contracted at the fastest pace in 16 months in April, reflecting the impact of the US-China trade war, but the survey result also fuelled hopes for stronger government stimulus.
“We believe Beijing needs to take bolder moves,” Nomura Chief China economist Lu Ting wrote, estimating that 2.2% of China’s GDP will be directly hit by the tariffs. “Beijing has remained calmer than markets expected, but the risk is a worse-than-expected demand shock.”
“Government stabilisation efforts will keep growing, and there will be more willingness for listed companies to distribute dividends and buy back shares,” said Zheng Gang, strategist at Yingda Securities.
The brokerage recommends high-dividend blue-chips, consumer stocks and tech shares, betting they will benefit from Beijing’s policy to boost consumption and support homegrown technologies.
China’s artificial intelligence (AI) stocks jumped after Chinese President Xi Jinping used a visit to Shanghai on Tuesday to push for breakthroughs in AI.
Comments
Comments are closed for this article.