Shanghai and Hong Kong Stock Market Indexes Diverge

Li Chen
17 Apr, 2024
Hong Kong

Benchmark indexes in Shanghai edged higher, and the reference index in Hong Kong edged lower on the prospects of rates staying higher for longer. 

Market indexes in Hong Kong decreased after U.S. Federal Reserve chairman Jerome Powell struck a hawkish interest rate tone. 

Traders dialed down rate expectations in Hong Kong after Powell's comments because the Hong Kong dollar is liked by the U.S. dollar, and the Hong Kong Monetary Authority adjusted rates in lockstep with the U.S. interest rate changes. 

The CSI 300 index advanced 0.7% to 3,535.36, and the Hang Seng index decreased 0.1% to 16,238.09. 

Electric vehicle makers advanced after investors searched for bargains in recently beaten-down stocks. 

Li Auto advanced 2.3% to HK$113.20, BYD gained as much as 1% before falling down 1% to $203.0, and Xpeng gained 1.3% to $28.0. 

Banks advanced as investors returned after the Chinese economy expanded at a faster-than-expected 5.3% in the first quarter, but gains were limited after  Fitch Ratings lowered its view on the sector. 

Fitch lowered its credit rating outlook to negative from stable for Chinese banks, citing worries about China's public finances and cloudy economic outlook. 

ICBC gained 0.7% to HK$4.03, Bank of China jumped HK$3.29, and China Construction Bank advanced 0.4% to $4.78. 

HSBC Holdings declined 0.7% to HK$61.95, Agriculture Bank of China declined 0.5% to ¥4.41. 

Home builders traded mixed on the worries that the government is not likely to provide meaningful stimulus and may let some of the large state-controlled developers go under or force consolidation in the industry. 

Longfor Group declined 0.4% to HK$9.21, China Vanke gained 1.1% to HK$3.93, China Resources Land added 1% to $23.35, Henderson Land Development fell 2.2% to HK$22.55, and Sun Hung Kai Properties added 0.7% to HK$22.55.