Hong Kong shares face pressure amid concerns over Chinese economy

The Hong Kong shares slid on Thursday as China's economy looked poised to report its worst growth figures in a decade. The Hang Seng index settled 0.5 per cent lower at 26,755.63 points. The Hang Seng China Enterprises index fell 0.4 per cent. The sub-index of the Hang Seng tracking energy shares dipped 0.4 per cent, while the IT sector eased 0.1 per cent, the financial sector ended 0.4 per cent lower and the property sector lost 1.5 per cent.

Analysts polled by Reuters said Chinese annual GDP growth could decelerate to 6.3 per cent in 2019, and that the world's second-largest economy likely slowed to 6.4 per cent in the last quarter of 2018, the weakest since the financial crisis, as the Sino-U.S. trade war cooled domestic and export demand. Li Keqiang, the Chinese premier, warned of a difficult year ahead for the Chinese economy on Wednesday and vowed to increase investment in public services and infrastructure, expand consumption, to buffer the headwinds.

To avert a cash crunch in the market, the People's Bank of China injected a net $83 billion into the country's financial system on Wednesday, a daily record, and added 380 billion more yuan ($56.27 billion) to the financial system on Thursday. The central bank made the moves after money supply data showed several of China's key credit gauges continue to languish around record lows, and Germany, a key trade partner with China, reported its weaker-than-expected economic growth on Tuesday.

China's commerce ministry's announcement late in afternoon trading that Liu He, a Chinese vice premier, will visit the U.S. for trade talks on Jan. 30 and 31, was not enough to reverse losses in the Hong Kong market. The top gainer on the Hang Seng was Sino Biopharmaceutical Ltd, which advanced 2.9 per cent, while the biggest loser was Country Garden Holdings Co Ltd, which fell 3.5 per cent. ** China's main Shanghai Composite index closed down 0.4 per cent at 2,559.64 points, while the blue-chip CSI300 index lost 0.6 per cent.

Around the region, MSCI's Asia ex-Japan stock index weakened 0.2 per cent, while Japan's Nikkei index closed down 0.2 per cent. The three biggest H-shares percentage decliners were Byd Co Ltd, which was down 6.1 per cent, China Vanke Co Ltd, which fell 3.7 per cent and CITIC Ltd, down by 3.3 per cent. About 1.92 billion Hang Seng index shares were traded. The volume traded in the previous session was 1.77 billion. At the close, China's A-shares were trading at a premium of 17.25 per cent over the Hong Kong-listed H-shares. The short and one-factor leveraged Hang Seng index, which is designed to replicate the payoff of a short or leveraged portfolio and is linked to the movements of the Hang Seng Index, was higher by 0.55 per cent on the day at 5,167.62 points.