China Stocks, Yuan Retreat as Trade Data Worsen Growth Concerns - EcoFinBiz Blog

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China Stocks, Yuan Retreat as Trade Data Worsen Growth Concerns

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(Bloomberg) -- Shares in Hong Kong and Shanghai fell and the yuan declined as China’s weakest trade data since 2016 highlighted the impact of the dispute with the U.S. and a slowing economy.

The Hang Seng Index broke a six-day winning streak, falling 1.6 percent as of 3:22 p.m. local time, with oil companies and Macau casino stocks among the worst performers. The Shanghai Composite Index closed down 0.7 percent and the ChiNext gauge dropped 1.2 percent. The offshore yuan fell 0.2 percent against the greenback while its onshore counterpart -- coming off its strongest week since 2005 -- was little changed after erasing a 0.5 percent gain.

“The economy isn’t going anywhere and corporate earnings are likely bad, so all investors can do is try and find some speculative trade ideas,” said Shen Zhengyang, a Shanghai-based strategist with Northeast Securities Co. “The market is trapped in a downtrend despite earlier gains, and trading will likely remain light ahead of Chinese New Year.”

China’s December exports in dollar terms fell 4.4 percent from a year earlier, while imports dropped 7.6 percent. Both were the worst result since 2016. The data add to evidence of a worsening slowdown as the trade dispute bites, and bring into question the effectiveness of China’s measures to support growth.

Hong Kong’s Hang Seng Index -- after climbing 6.4 percent over six days -- is facing profit-taking pressure, said Ben Kwong, KGI Asia executive director. Developments on Brexit this week and U.S. corporate earnings are also stoking uncertainty, he said.

Other market news:

  • Prada SpA shares fall as much as 9.8 percent in Hong Kong to their lowest level since August 2016
  • China doubled the limit of one of the main foreign investment channels into the world’s second-biggest economy.
  • Fang Xinghai, a top official at China’s securities regulator, recommended removing the limit on how much stocks can gain on their trading debuts.
    • China Stocks Linked to Futures Jump as Govt Eyes Easier Trading
  • Lenovo surges as much as 6.3% in Hong Kong, biggest intraday gain since Nov. 9, after Goldman Sachs upgraded the stock to buy and raised its price target.
  • China’s CSI 300 Index falls 0.9 percent, with a gauge of health care-related stocks falling 2.3 percent.

To contact Bloomberg News staff for this story: David Watkins in Hong Kong at dwatkins19@bloomberg.net;Amanda Wang in Shanghai at twang234@bloomberg.net;Jeanny Yu in Hong Kong at jyu107@bloomberg.net

To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, David Watkins, Will Davies

©2019 Bloomberg L.P.

With assistance from Bloomberg

. Read more on China by BloombergQuint.

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