HSI Stays In Red As Asian Markets Retreat

Hong Kong stocks fell on Wednesday morning following the previous day's big gains, with energy firms hit by a sharp drop in oil prices.

The Hang Seng Index slipped 0.2 percent, to 28,823 by the break.

On the mainland, the Shanghai Composite Index lost 0.7 percent, 3,022 while the Shenzhen Composite Index shed 0.6 percent, to 1,608.

The markets dipped after People's Bank of China (PBOC) appeared to temper expectations for near-term stimulus measures.

Yi Gang said growth was near potential, interest rates were about right and monetary policy was accommodative enough to absorb various situations.

"Gang sent more hawkish signals by tempering expectations for significant credit growth in [the second half of] 2019" following the positive outcome of the Trump-Xi meeting, said Stephen Innes at Vanguard Markets.

"If this is true, it's horrible for a market that was positioning for a fillip from a PBOC policy response and a noteworthy shift from his dovish remarks just a few weeks ago that there is 'tremendous room' for additional policy stimulus in China."

The remarks come soon after data showed factory activity in China continued to shrink in June,

Most other regional markets were also down with Tokyo losing 0.7 percent by the break.

Singapore fell 0.4 percent, Seoul dropped 0.8 percent, Taipei gave up 1 percent and Jakarta shed 0.2 percent, though Sydney was up 0.4 percent.

Oil prices edged up slightly after data showed another drop in US stockpiles, but they were nowhere near biting into the more than 4 percent falls suffered on Tuesday on demand fears. (AFP)

______________________________