China Stocks Face Headwinds Ahead of Tuesday's Economic Releases

Li Chen
15 Apr, 2024
Hong Kong

Stocks in Shanghai and Hong Kong diverged amid rising tensions in the Middle East. 

Iran conducted its missile and drone attacks targeting Israeli territory over the weekend, retaliating for Israel's military strike on Iran's embassy in Syria. 

The prospect of a wider war in the Middle East raised worries about crude oil supply disruptions and more attacks in the Red Sea. 

Crude oil futures prices traded volatile amid growing worries of supply disruptions in the Middle East, and Brent crude oil prices advanced to a five-month high of $90.16 a barrel in Singapore trading. 

The CSI 300 index increased 2.2% to 3,549.08, and the Hang Seng index decreased 0.7% to 16,613.29. 

The Hang Seng index decreased to a three-week low amid weak market sentiment as investors await the release of first quarter gross domestic product, March retail sales, and jobless rate data on Tuesday. 

China has set a target rate of 5% for the economy to expand in 2025, but investors are worried that the second-largest economy in the world may face headwinds in meeting its lofty goal. 

Last week, China reported that exports declined 7.5% in March and consumer prices rose 0.1%, confirming a fragile recovery and weak consumer demand. 

China property prices were in focus, after China Vanke said it has sufficient funds to meet its liquidity requirements.

S&P Global downgraded the real estate developer's long-term credit rating, following similar moves by Fitch Ratings and Moody's earlier in the month. 

The company also denied that travel restrictions were imposed on its key executives and rejected the idea that the company's anchor shareholders were siphoning off funds from the company's accounts. 

Chairman Yu Liang and President Zhu Jiusheng said during the meeting held on Sunday that the company is working on its plan to lower its debt by 100 billion yuan or $13.8 billion by next year. 

The company also confirmed that it has support of its largest shareholder Shenzhen Metro and state asset regulator of Shenzhen, according to a regulatory filing.  

Moreover, the company is set to complete and deliver apartment homes in a timely manner. 

China Vanke decreased 1.3% to HK$3.80, China Resources Land fell 3.3% to HK$33.30, and Longfor Group eased 0.7% to HK$9.34. 

Zhiejiang Honxing Technology soared more than 260%, and the electric vehicle wheelmaker listed its stock on the Shenzhen stock exchange at 38.69 yuan per share.