Sands, Macau casino peers lead Hong Kong stock rebound on GDP outlook while Xpeng, BYD slide as Tesla seen heightening price war

Hong Kong stocks rose, snapping a two-day decline, as investment banks including JPMorgan Chase raised their China growth forecasts following a stronger than expected expansion last quarter. Xpeng and BYD tumbled after Tesla cut prices and aimed to boost sales volume.

The Hang Seng Index added 0.1 per cent to 20,396.97 at closing of Thursday trading. The Tech Index dropped 0.1 per cent while the Shanghai Composite Index declined 0.3 per cent.

Casino operator Sands China gained 4 per cent to HK$29.90 and peer Galaxy Entertainment climbed 0.5 per cent to HK$58.25. Chip maker SMIC surged 6.2 per cent to HK$25.60. Meituan jumped 3.5 per cent to HK$140.40.

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JPMorgan lifted its GDP forecast to 6.4 per cent from 6 per cent for 2023, while UBS raised its target to 5.7 per cent from 5.4 per cent. Goldman Sach retained its annual forecast at 6 per cent, while trimming its sequential second-quarter growth rate to 4.9 per cent from 5.5 per cent, as it sees the post-Covid rebound fading.

"Investor sentiment was boosted by consumption data, including positive economic growth, and expectations of another around of stimulus policy," said Kenny Wen, head of strategy based in Hong Kong at KGI Securities.

Electric-car makers slumped, restraining the market advance. Xpeng sank 8.8 per cent to HK$37.40 while BYD fell 0.9 per cent to HK$227.60 and Geely Auto retreated 1.2 per cent to HK$9.87. Nio lost 6 per cent to HK$67.55. Elon Musk on Wednesday said Tesla would prioritise sales volume over profit, suggesting more intense competition ahead, soon after cutting prices on some of its models in the US markets.

Meanwhile, Yuexiu Property was halted from trading, together with some of its listed bonds, pending an announcement on inside information, it did not elaborate. The stock slipped 3.2 per cent on Wednesday to HK$12.56, trimming this year's advance to 28 per cent.

Elsewhere, China's commercial lenders kept lending rates unchanged on Thursday, leaving the one-year loan prime rate at 3.65 per cent for the eighth straight month, data from the national bureau showed on Thursday. The five-year rate, a reference for home mortgages, remained at 4.3 per cent.

Semiconductor producer Hefei Chipmore Technology, the only market debutant today, surged 43 per cent to 17 yuan in Shanghai.

Major Asian markets were mixed. The Nikkei 225 in Japan added 0.2 per cent while the Kospi Index in South Korea dropped 0.5 per cent and the S&P/ASX 200 in Australia was little changed.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

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