China and Hong Kong equity markets edged lower on Monday as weak domestic economic data dampened investor sentiment. April’s softer-than-expected growth in industrial output and retail sales added to concerns about the recovery’s momentum in the world’s second-largest economy.
By midday, the CSI300 Index had dropped 0.4%, while the Shanghai Composite eased 0.1%. Hong Kong’s Hang Seng Index also slipped 0.5%.
Despite the recent 90-day Sino-US tariff truce that initially fueled optimism, the rally in mainland and Hong Kong stocks is showing signs of exhaustion. Guosheng Securities advised caution, noting that “fluctuation within a wide range remains our base case scenario.”
However, shares of Chinese port operators bucked the trend. Investors speculated that the temporary suspension of tariffs would prompt exporters to accelerate shipments. Lianyungang Port, Ningbo Port, and Zhuhai Port each hit their daily 10% limit, while China Merchants Port and Shanghai International Port also gained strongly.
Zhiwei Zhang, president of Pinpoint Asset Management, noted that exporters may ramp up production and deliveries in anticipation of possible future tariff hikes.
Meanwhile, Hong Kong-listed shares of Midea Group and ZTO Express rallied after being slated for inclusion in the Hang Seng Index next month. In contrast, China Literature shares sank over 8% after news it would be removed from the Hang Seng Tech Index.
