Alibaba
and many other stocks listed in Hong Kong dropped on Monday as the mainland Chinese markets reopened following the Lunar New Year holiday period. Investors were disappointed despite some positive signs for the world’s second-largest economy.
Alibaba’s
Hong Kong-listed shares slipped 2.1% as the wider
Hang Seng Index
lost 1.1% in Monday trading. Hong Kong markets reopened in the middle of last week after the closure for Lunar New Year, but Monday marked the first day back for mainland China, where the
Shanghai Composite
gained 1.6%. But even that positive performance in Shanghai has been met with muted reaction from investors.
“Chinese onshore stocks saw only modest gains on Monday morning after the market reopened from a week-long celebration of the Lunar New Year … despite positive travel and spending data showing strength in consumption during the holiday period,” Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a note.
China’s economy has slowed down over the past year, with deflationary pressures and stresses from the indebted property sector weighing heavily on Chinese stocks. While China’s economy faces structural issues, there are hopes that the Year of the Dragon could usher in some relief.
More immediately, investors have digested data covering the holiday period, with tourism revenue surpassing 2019 levels. But that indicator was just not enough to continue recent gains in Hong Kong stocks or allow Shanghai to fully catch up with global markets that have gained since the closure for Lunar New Year.
“Investors continue to look for further evidence of policy support … as government messages and measures thus far have failed to excite markets in a sustained way,” said Haefele. “We see a step-up in policy support this year in our base case.”
Write to Jack Denton at [email protected]
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