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Hong Kong stocks but solid China economic data offers support

Hong Kong stocks but solid China economic data offers support

CENTRAL: Hong Kong stocks were little changed at the midday break on Tuesday, with caution the watchword amid concerns over the possibility of higher interest rates in Hong Kong after recent interventions by monetary authorities to support the local dollar.

Data showing the Chinese economy remained on a solid footing in the first quarter offered support however. The country’s GDP grew 6.8 per cent in the first quarter from a year earlier, unchanged from the fourth quarter and in line with economist estimates. Retail sales in March rose, as did fixed asset investment.

The Hang Seng Index stood at 30,316.14 at midday, down 0.1 per cent for the session, while the Hang Seng China Enterprises Index, or the H-share gauge, edged down 0.16 per cent, or 18.95 points, to 11,989.18.

“Rising interest rates will keep worrying the market. Property developers slid on higher borrowing costs to fund their projects,” said Louis Tse Ming-kwong, managing director at VC Asset Management.

Rates in Hong Kong are expected to rise after the Hong Kong Monetary Authority intervened in the foreign exchange market again on Monday, spending HK$9.357 billion to absorb local currency funds, bringing the total amount of its purchases to HK$19 billion since currency fell to the bottom of its permitted trading band on Thursday.