Hong Kong Stocks Widen Losses After Weak China Data

MarketWatch Pulse

Hong Kong stocks widened their early losses Tuesday morning after a preliminary March reading of Chinese manufacturing activity dropped below market expectations to a 11-month low. The Hang Seng Index fell 0.6%, with the mainland-China-tracking Hang Seng China Enterprises down 1.3%. On the Chinese mainland itself, however, the Shanghai Composite Index overcame a post-data drop to seesaw near its previous closing level, seeking a 10th straight winning session. Major mainland Chinese banks lost ground, as China Merchants Bank Co. led losses with a 2.5% decline. Bank of China Ltd. fell 1.6%, China Citic Bank Corp. and China Construction Bank Corp. both sagged 1.4% apiece, and Industrial & Commercial Bank of China Ltd. and Bank of Communications Co. shed 1.2% each. The weakness came as HSBC reported 15 minutes into the session that the "flash" version of its China manufacturing Purchasing Managers' Index dropped to 49.2, below the 50 level dividing expansion from contraction, after printing at 50.7 in the final February read. Also among the banks, Agricultural Bank of China Ltd. gave up 0.8% ahead of its earnings slated for later in the day. Other companies scheduled to announce results on Tuesday saw their stock trade mixed, as China Life Insurance Co. lost 1.6%, Citic Ltd. dropped 0.5%, and power producer Huaneng Power International Inc. rose 0.7%, and property developer China Overseas Land & Investment Ltd. edged up 0.2%. Meanwhile, developer Sunac China Holdings Ltd. gained 0.6%, after its 2014 net profit rose 1.4%.

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