January 2, 2019 / 4:30 AM / 10 months ago

China stocks slide as factory activity shrinks, Hong Kong skids

* SSEC -1.0 pct, CSI300 -1.2 pct, HSI -2.4 pct

* China factory activity shrinks for first time in over 2 years, 2019 looks tougher

* FTSE China A50 -1.2 pct, BNY Mellon ADR China Select Index -0.4 pct

SHANGHAI, Jan 2 (Reuters) - China and Hong Kong stocks dropped on Wednesday, starting the new year on a bearish note, as lacklustre data from the world’s second-largest economy stoked worries about a global economic slowdown.

** The CSI300 index was down 1.2 percent at 2,974.67 points at the end of the morning session, while the Shanghai Composite Index lost 1 percent to 2,468.81 points.

** In Hong Kong, the Hang Seng index dropped 2.4 percent to 25,229.88 points, while the Hong Kong China Enterprises Index lost 2.7 percent to 9,849.34.

** China’s factory activity contracted for the first time in over two years in December, highlighting the challenges facing Beijing as it seeks to end a bruising trade war with Washington and reduce the risk of a sharper economic slowdown in 2019.

** The official Purchasing Managers’ Index (PMI) - the first snapshot of China’s economy each month - fell to 49.4 in December, below the 50-point level that separates growth from contraction, a National Bureau of Statistics (NBS) survey showed on Monday.

** Largely dovetailing with the official survey, a private survey showed China’s factory activity contracted for the first time in 19 months in December as domestic and export orders continued to weaken.

** China’s monetary policy stance has not shifted, but a greater focus will be placed on flexible policymaking to adjust to changes, a central bank official said, with the Chinese economy widely expected to face more headwinds next year.

** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 1.51 percent, while Japan’s Nikkei index slipped 0.31 percent.

** The yuan was quoted at 6.8577 per U.S. dollar, 0.22 percent firmer than the previous close of 6.873.

** The largest percentage gainers in the main Shanghai Composite index were Beijing Airport High-Tech Park Co Ltd , up 10.06 percent, followed by Aerospace Communications Holdings Co Ltd, gaining 10.03 percent and Eastern Communications Co Ltd, up by 10.03 percent.

** The largest percentage losses in the Shanghai index were Kangmei Pharmaceutical Co Ltd, down 9.99 percent, followed by Hubei Jumpcan Pharmaceutical Co Ltd, losing 9.36 percent and Zijin Mining Group Co Ltd, down by 8.08 percent.

** The top gainers among H-shares were Postal Savings Bank of China Co Ltd, which rose 0.73 percent, followed by Hengan International Group Co Ltd, which gained as much as 0.88 percent and Guangzhou Automobile Group Co Ltd , which climbed 1.41 percent.

** The three biggest H-shares percentage decliners were CSPC Pharmaceutical Group Ltd, which lost 6.55 percent, SINOPHARM GROUP CO LTD, which slipped 5.8 percent and CNOOC Ltd, which fell 5.4 percent.

** As of 0403 GMT, China’s A-shares were trading at a premium of 18.76 percent over the Hong Kong-listed H-shares.

Reporting by Luoyan Liu and John Ruwitch, Editing by Sherry Jacob-Phillips

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