China, HK stocks end lower

SHANGHAI: Mainland China and Hong Kong stocks closed lower on Tuesday, weighed down by new energy shares, as traders assessed subdued sentiment across global markets ahead of closely watched US economic data.

Both Asian and US equities retreated, with investors taking a cautious stance as they await the release of delayed US economic indicators that could shed light on the Federal Reserve’s timeline for policy easing and influence global financial conditions.

The data backlog, caused by the recent US government shutdown, will start to clear this week, with the critical September nonfarm payrolls report scheduled for release on Thursday.

Markets have trimmed their bets for a December Fed rate cut, pricing in just over a 40percent chance of a 25-basis-point reduction, down from more than 60percent earlier this month. At the close, the Shanghai Composite index lost 0.81 percent, while the blue-chip CSI300 index slipped 0.65 percent.

New energy stocks were among the biggest losers, with the sector key sub-index falling 3.19percent. Another sub-index, which also tracks the sector, plunged 3.56percent. In Hong Kong, the benchmark Hang Seng Index fell 1.72percent, while the city’s tech index dropped 1.93percent. Despite marginal losses on Tuesday, the SSEC has still gained about 18percent year-to-date, when the HSI witnessed a nearly 30percent jump. And some analysts expect the upward momentum to sustain next year.

“We expect another positive year ahead for the Chinese equities as many of the favourable drivers from 2025 should continue to support the market,” said James Wang, head of China strategy at UBS Investment Bank Research, referring to factors including AI, accommodative policy and sustained fiscal expansion and ample liquidity. “We continue to prefer internet, hardware tech and broker names while we remove high dividend stocks as their yield has been bid down and we add select ‘going abroad’ stocks as global growth improves next year,” Wang said.

Separately, China bought at least 14 cargoes of US soybeans on Monday, traders told Reuters, its largest purchase since at least January and the most significant since a summit between US President Donald Trump and his Chinese counterpart Xi Jinping in October.