Hong Kong stocks took a nosedive on Monday, as key economic data revealed China's growth is losing steam. This news sent investors into a frenzy, questioning the sustainability of a nearly 30% market rally this year. The Hang Seng Index plummeted 0.9% to 25,737.85 at noon, with the Hang Seng Tech Index dropping a staggering 1.8%. On the mainland, the CSI 300 Index slipped 0.2%, and the Shanghai Composite Index lost 0.1%.
Drug makers were hit the hardest, with Hansoh Pharmaceutical Group plunging 7.6% to HK$39.72 and Innovent Biologics tumbling 4.9% to HK$81.05. Chinese search engine giant Baidu slid 4.2% to HK$120.70, and short-video platform operator Kuaishou Technology declined 3.9% to HK$64.85. Even Alibaba Group Holding couldn't escape the downturn, falling 2.7% to HK$149.90.
However, not all was gloom and doom. Ping An Insurance Group rose 2.4% to HK$65.30 after a Morgan Stanley note highlighted the market's potential underestimation of the insurer's growth and profit prospects. Hang Seng Bank also saw a 0.3% increase to HK$153.50, with its shareholders set to vote on a US$14 billion privatization plan by HSBC Holdings on January 8.
China's retail sales growth slowed to a mere 1.3% year-over-year in November, the weakest pace since December 2022 when COVID-19 restrictions were lifted. This figure fell short of the projected 2.9% increase, indicating a potential slowdown in consumer spending. Meanwhile, industrial production climbed 4.8% last month, but fixed-asset investment contracted 2.6% in the January-to-November period, both figures falling short of expectations. A separate report by the National Bureau of Statistics revealed that home prices continued their downward spiral last month.
