China Indexes Extended Weekly Losses Ahead of the Release of Key Economic Data

Li Chen
14 Jun, 2024
Hong Kong

Investors turned cautious ahead of the release of key economic data on Monday amid simmering trade tensions with the European Union. 

The CSI 300 index and the Hang Seng index extended weekly losses to more than 2% as investors worried that markets may have risen more than economic fundamentals justify. 

Despite the flurry of announcements from Chinese central and local authorities, little has changed in the troubled property market, one of the key drivers of the Chinese economy. 

Benchmark indexes in Shanghai and Hong Kong soared as much as 20% from the low in late January to mid-May after the People's Bank of China relaxed mortgage rules and local authorities in Shenzhen and Shanghai eased conditions to buy residential property. 

However, consumers have restricted purchases to basic necessities amid job market uncertainty, salary cuts, lengthened payment cycles, an uneven policy response, and falling but elevated property prices. 

Market sentiment was cautious ahead of the release of retail sales, fixed investment, and industrial production data on Monday. 

The People's Bank of China is set to announce its official lending rates next week and new lending and aggregate lending data on Monday. 

 

China Stock Movers 

The CSI 300 index decreased 0.4% to 3,512.03 and the Hang Seng index fell 0.7% to 17,991.04. 

Chinese electric vehicle makers declined for the second day in a row after the European Union imposed additional tariffs on Chinese passenger cars. 

BYD declined 1.9% to HK$228.20, Li Auto dropped 0.5% to HK$74.0, and Geely Automobile decreased 1.6% to HK$8.90. 

Chinese authorities signaled that they are likely to announce their restrictive tariffs on agriculture, cattle meat, and dairy products imported from the European Union. 

Chow Tai Fook tumbled 9% to HK$8.61 after the jewelry retailer announced a smaller-than-expected dividend and confirmed weak sales growth in the last two months. 

Revenue in the fiscal year ending in March rose 14.8% to HK108.7 billion, net profit advanced 20% to HK$6.6 billion from HK$5.5 billion, and earnings per share increased 21% to 65 HK cents. 

The company declared a full-year dividend of 55 HK cents, an 84.6% payout ratio. 

The company announced a  final dividend of 30 HK cents payable on August 20 to shareholders on record on August 2. 

Cloud Factory Technology Holdings declined as much as 10% before recovering to HK$3.90 after the company priced its initial public offering at HK$4.0 per share. 

Kweichow Moutai dropped as much as 2% before recovering to a decline of 0.6% to HK¥1,545.36 on reports that some of its expensive distilled liquor products were selling at a discount in mainland China amid cooling demand.