China and Hong Kong stocks flat as industrial profits slump
CHINA and Hong Kong stocks closed roughly flat on Wednesday (Jun 28), as data showed profits at Chinese industrial firms declined in May, and investors fretted over news that the US was weighing new restrictions on AI chip exports to China.
China’s blue-chip CSI300 Index and the Shanghai Composite Index closed roughly flat, after losing 0.5 per cent each in the morning session. Hong Kong’s benchmark Hang Seng Index was little changed.
Profits at China’s industrial firms tumbled 18.8 per cent year-on-year in the first five months of 2023, data showed, as companies were hit by a margin squeeze from softening demand amid a stumbling post-Covid economic recovery.
Goldman Sachs analysts said in a note that China’s industrial profits rose, while revenue declined from April to May.
“The sequential improvement was likely related to ongoing policy support for the manufacturing sector,” the analysts said.
A Wall Street Journal report said the US might stop shipments of AI chips made by Nvidia and others to China.
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Artificial intelligence (AI)-related stocks traded in China were down as much as 4.8 per cent.
Northbound trading saw a net capital outflow of 4.1 billion yuan (S$765 million), the highest outflow in a month.
In the property sector, Hong Kong private home prices retreated 0.7 per cent in May from 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.
Meanwhile, a few developers including Gettown Holdings and CCCG Real Estate received regulatory approvals for share private placements. However, their shares barely reacted to the news. REUTERS
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