The Hang Seng Index lost 0.1 per cent to 17,080.53 as of 11.05am local time on Monday, after a week of gain. The Tech Index declined 0.4 per cent, while the Shanghai Composite Index was little changed.
Limiting losses, Tencent jumped 0.9 per cent to HK$373.40 and Alibaba added 0.3 per cent to HK$78.10. HSBC gained 0.6 per cent to HK$64.35 and Bank of China (HK) climbed 0.5 per cent to HK$22.40, leading gains among local lenders.
Traders are awaiting more economic data this week to gauge whether China’s economy is finding traction. Retail sales are likely to have grown at a faster pace of 2.6 per cent in July, while July industrial production growth is expected to slow to 5.2 per cent, according to the consensus of economists polled by Bloomberg.
Meanwhile, signs of easing from China’s central bank failed to overturn the mood. The People’s Bank of China pledged to “create a favourable monetary and financial environment for achieving the full-year economic and social development goals” in its second quarter monetary policy report.
The central bank is likely to deliver a 25-basis-point cut to the reserve requirement ratio in the third quarter to facilitate increased government bond issuance, and a 10-basis-point policy rate cut in the last quarter to lower funding costs for the real economy, according to Goldman Sachs.
“While the improvement in the global markets provides favourable conditions for Hong Kong, the sustainability of capital inflows and market rebounds still depends on domestic policy responses,” Kevin Liu, equity strategist and managing director at CICC, said in a note on Sunday. It is still difficult for global funds to continue flowing back to local markets as risk-aversion sentiment remains elevated, he added.
Other major Asian markets gained on Monday. Japan’s Nikkei 225 added 0.6 per cent, South Korea’s Kospi Index rose 1.1 per cent and Australia’s S&P/ASX 200 Index climbed 0.6 per cent.