China, Hong Kong and its flat-flop stocks

China and Hong Kong’s economy are disbalancing every now and then. Data showed profits at Chinese industrial firms declined in May as investors also grumbled over U.S. new restrictions on AI chip exports to China. It led to a rough fall on China and Hong Kong stocks last Wednesday.

Crucial pointers:

  1. China’s blue-chip CSI300 Index and the Shanghai Composite Index closed harshly after a drop of 0.5% each in the morning session.
  2. Some fluctuation was seen on Hong Kong’s benchmark Hang Seng Index.
  3. Profits at China’s industrial firms collapsed 18.8% year-on-year in the first five months of 2023. As data showed, companies were hit by a margin during post-Covid economic recovery.
  4. Goldman Sachs analysts said in a note that China’s industrial profits rose, while a drop is seen from April to May. “The sequential improvement was likely related to ongoing policy support for the manufacturing sector,” the analysts said.
  5. A Wall Street Journal report said the United States might stop shipments of AI chips made by Nvidia and others to China.
  6. Artificial intelligence (AI)-related stocks traded in China were down as much as 4.8% percent.
  7. The net capital outflow of Northbound trading was 4.1 billion yuan ($566.69 million), the highest outflow in a month.
  8. In the property sector, Hong Kong private home prices withdrew 0.7% in May and April, the first fall in four months, as many home buyers stayed on the sidelines amid uncertainty over interest rate hikes and the economic outlook.
  9. Gettown Holdings and CCCG Real Estate Corp. received regulatory approvals for shared private placements. However, their shares barely reacted to the news. ($1 = 7.2350 Chinese yuan)

- Published By Team Hongkong Journalist

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