China and Hong Kong stocks lower as Ukraine woes

HONG KONG: China stocks slipped on Wednesday, while Hong Kong shares were mixed, as geopolitical tensions ahead of the Ukraine war’s first anniversary and a sell-off on Wall Street overnight dragged the markets.

** China’s blue-chip CSI300 Index lost 0.56%, while the Shanghai Composite Index edged down 0.25%.

** The Hang Seng Index was flat, while the Hang Seng China Enterprises Index dropped 0.65%.

** Wider Asian share markets followed Wall Street into the red as surprising strength in global surveys of services stoked fears that central banks would have to lift interest rates yet further and keep them up for longer.

** U.S. President Joe Biden and Russian President Vladimir Putin have been sparring verbally, presenting starkly different views of the world and the Ukraine war — Biden promising to defend democracies and Putin asserting the West was a threat to Russia.

** China’s top diplomat told one of Putin’s closest allies on Tuesday Beijing’s relationship with Moscow was “rock solid”. Meanwhile, Chinese leader Xi Jinping is preparing to visit Moscow for a summit with Putin in the coming months, the Wall Street Journal reported on Tuesday.

** In Hong Kong, Financial Secretary Paul Chan on Wednesday said the city’s economy is expected to rebound3.5%-5.5% this year after shrinking 3.5% in 2022.

** Timothy Moe, chief Asia-Pacific equity strategist at Goldman Sachs maintains a positive view on Chinese equities, highlighting the stocks are still trading 40-45% below the peak in early 2021.

** “The valuation is about 10.8 times earnings, which has come back to levels that are certainly much more reasonable and affordable,” Moe told a media briefing Wednesday.

** He also expects China A-shares have the lowest correlation to U.S. equity weakness within Asia.

** Wang Ying, stock index futures analyst at Nanhua Futures, shares the view, saying although main risk may come from geopolitical tensions, “There is no base for China A-shares to experience a big retreat in the short term.”

** Telecom stocks lost momentum, falling 1.9% to lead the decline.

** Tech giants listed in Hong Kong extended weakness, went down 0.9%