Hong Kong Stocks See Big Morning Losses

Hong Kong stocks finished Thursday morning sharply lower as forecast-beating economic growth in the mainland was unable to offset fears over a fresh outbreak of coronavirus in the city and elsewhere around the world that has led to new containment measures.

The Hang Seng Index fell 1.2 percent, or 298 points, to 25,183.

The Shanghai Composite index was down 1.4 percent at 3,314 points at the break, while the smaller Shenzhen index was down 1.3 percent.

Markets across Asia also fell, despite better-than-expected economic growth data from China.

Tokyo fell 0.5 percent and Sydney shed 0.4 percent. Seoul dropped 0.7 percent and Singapore was off 0.3 percent while Wellington and Taipei were also in the red.

Beijing said the world's top economy expanded 3.2 percent in the second quarter, indicating China is well on the road to recovery after months of lockdowns that caused a first-quarter contraction.

However, while the reading was welcomed, analysts said investors had largely priced a recovery into prices and pointed to a worse-than-expected drop in retail sales in June – a small rise had been forecast – suggesting consumers are still reticent about spending.

The retail sector has taken on an increasingly crucial role in China's economy as leaders look for consumers, rather than trade and investment, to drive growth.

"No matter how much stimulus and fiscal sugar you try to entice consumers with, they will not leave their apartment and go on a spending spree until they feel confident the landscape is virus-free," said AxiCorp's Stephen Innes. (AFP, Reuters)

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