China, HK stocks mixed on uneven recovery trends in Q1 growth data

CHINA and Hong Kong shares were mixed on Tuesday (Apr 18) and traded in a narrow range, as the country reported higher-than-expected first-quarter growth but some data pointed towards uneven recovery trends.

China’s blue-chip CSI 300 Index ended 0.3 per cent higher, while the Shanghai Composite Index edged up 0.23 per cent.

The Hang Seng Index, however, lost 0.63 per cent while Hang Seng China Enterprises Index slipped 0.75 per cent.

China’s economy grew 4.5 per cent year-on-year in the first three months of the year, data from the National Bureau of Statistics showed on Tuesday, faster than the 2.9 per cent reported in the previous quarter and beating analysts’ forecasts of a 4 per cent expansion.

Industrial output rose 3.9 per cent in March year-on-year, accelerating from a 2.4 per cent increase in the first two months but missing expectations slightly.

“The better-than-expected economic data shatters worries for a weak recovery, but it’s not showing a strong recovery either,” said Tao Chuan, chief macro analyst at Soochow Securities in Beijing.

Consumption is strong hinting at rising demand, but there are also some structural problems, Tao added.

Property investment fell 5.8 per cent from a year earlier in the first three months of 2023, from a 5.7 per cent decline in January-February.

The data is mixed, said Pang Xichun, research director at Nanjing RiskHunt Investment Management.

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“The market is disappointed as property investment fell in the first quarter, which is a surprise after many property policies (that were) rolled out in the past year, while housing sales have rebounded.”

Property investment is a lagging indicator and the China property market has turned a corner, although the road ahead could be long and filled with bumps, said David Chao, global market strategist, Asia Pacific (ex-Japan), Invesco.

Hong Kong-listed mainland property firms dove 1.4 per cent, while tech giants declined 1.2 per cent.

In China A-shares, insurance companies and telecom stocks led the gains, rising 3.1 per cent and 1 per cent, respectively. REUTERS