SHANGHAI, March 9 ― Hong Kong shares bounced today in a volatile morning session amid sector rotation by investors, while China's blue-chip stocks eked out a small gain after yesterday's sharp sell-off.
The Hang Seng index fell in the first half hour of trade as tech shares slumped as much as 4.6 per cent. However, the tech sub-index bounced back to trade 1.95 per cent higher by the midday break, helping the broader index to finish the morning session up 1.35 per cent.
“This is just some volatile trading because we have seen a huge fall over the last few sessions,” said Alex Wong, director at Ample Finance Group.
“The overall market is not that bad because people are just doing sector rotations ... they are not bearish on everything,” he said, adding that he expected the market to stabilise.
China's blue-chip CSI300 index edged up 0.03 per cent after shedding more than 2 per cent earlier in the day, as heavyweight consumer firms including Kweichow Moutai Co Ltd found their footing. The Shanghai Composite index trimmed earlier losses and was down 0.18 per cent.
Kweichow Moutai, a favourite of foreign investors, rose 1.52 per cent after a 4.86 per cent drop yesterday, though it remains nearly 25 per cent down from its February 18 peak.
Refinitiv data showed net inflows today from foreign investors into A-shares through Stock Connect.
Traders dismissed reports that the market's turnaround on Tuesday was a result of state intervention, with a Beijing-based fund manager saying the market had been oversold on a gloomier outlook for stocks.
“The pace of China's economic recovery slowed, according to PMI data for February, while rates have been rising continuously. Such a combination didn't bode well for equities,” said Zheng Zichun, an analyst with AVIC Securities.
Investors have been forced out of popular stocks and into areas like small-cap shares by worries about how authorities might rein in frothy valuations.
China's yuan also whipsawed this morning, touching a two-and-a-half-month low before recovering all its losses by midday to trade at 6.521 per dollar. ― Reuters
