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Tag: HK:HSI

  • China’s debt outlook cut to negative by Moody’s

    China’s debt outlook cut to negative by Moody’s

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    Moody’s Investors Service on Tuesday cut the outlook on China’s debt to negative from stable citing expectations that the national government will have to step in to rescue regional and local governments.

    Moody’s kept China’s long-term rating at A1.

    “The change to a negative outlook reflects rising evidence that financial support will be provided by the government and wider public sector to financially-stressed regional and local governments and state-owned enterprises, posing broad downside risks to China’s fiscal, economic and institutional strength,” said the note from the rating agency, which last month cut the outlook on the U.S.

    China’s property troubles mean that regional and local governments face a loss of land sale revenue, which accounted for 37% of their revenue in 2022 outside of central government transfers. Moody’s says regions that relied most heavily on land sales won’t be able to offset that revenue loss from other sources.

    Moody’s estimates one-third of state-owned enterprises debt — some 40% of GDP — has an interest coverage below 1, which indicates weak debt sustainability. “While not all [state-owned enterprises] are likely to need direct government support, even a moderate proportion doing so over the medium term would represent a significant crystallization of contingent liabilities for the sovereign, increasing the costs of financial support and diminishing fiscal strength,” said Moody’s.

    In a rough day for Chinese stocks, the Hang Seng
    HK:HSI
    fell 1.9%, and the Shanghai Composite
    CN:SHCOMP
    dropped 1.7%.

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  • U.S. stock futures slip after three-day break

    U.S. stock futures slip after three-day break

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    U.S. stock index futures slipped lower Tuesday after a three-day break, with Chinese equities wilting on disappointment over the monetary stimulus efforts in the world’s number-two economy.

    What’s happening

    • Dow Jones Industrial Average futures
      YM00,
      -0.31%
      fell 109 points, or 0.3%, to 34,495.

    • S&P 500 futures
      ES00,
      -0.26%
      dropped 11 points, or 0.2%, to 4,442.

    • Nasdaq 100 futures
      NQ00,
      -0.16%
      decreased 28 points, or 0.1%, to 15,239.

    On Friday, the Dow Jones Industrial Average
    DJIA,
    -0.32%
    fell 109 points, or 0.32%, to 34299, the S&P 500
    SPX,
    -0.37%
    declined 16 points, or 0.37%, to 4410, and the Nasdaq Composite
    COMP,
    -0.68%
    dropped 93 points, or 0.68%, to 13690.

    What’s driving markets

    Investors were in a cautious mood following the U.S. long weekend in honor of the Juneteenth federal holiday, but that’s after a strong run. The S&P 500 gained 2.6% last week, its fifth week in a row of gains, as the tech-heavy Nasdaq Composite took its winning run to eight weeks.

    Mike Wilson, Morgan Stanley’s chief U.S. equity strategist, said both retail and institutional investor sentiment are at their highest levels in over two years.

    “We note that the consensus is right about 80% of the time, which means such shifts in sentiment and positioning can often be right as the collective intelligence of the market knows best,” he said. “However, given our fundamental view on growth, we find it hard to get on board with the current excitement and narrative supporting it. In other words, if second half growth re-accelerates as expected, then the bullish narrative being used to support equity prices will be proven correct.”

    One event that investors have to weigh is the resumption this fall of student loan payments, and what that may mean for consumers’ disposable income. Student loan payments have been paused since the start of the pandemic in March 2020.

    China cut its 1- and 5-year lending rates by 10 basis points, which investors viewed to be modest, particularly after a Friday state council meeting didn’t result in other concrete measures. According to Societe Generale, there were expectations the 5-year rate, the benchmark for mortgages, would be cut by 15 basis points.

    The Hang Seng
    HSI,
    -1.54%
    fell 1.5% in Hong Kong.

    Alibaba
    BABA,
    -0.11%    ,
    the Chinese internet giant, also was in the spotlight after announcing that its CEO and chairman will step down to focus on the cloud division, with Brooklyn Nets owner Joseph Tsai becoming chairman.

    Tuesday’s economic data include housing starts data, which showed a 21.7% rise in May after a revised 2.9% drop in April. Building permits also climbed 5.2% in May.

    A panel later Tuesday will include both New York Federal Reserve President John Williams and Fed Vice Chair for Supervision Michael Barr. On Wednesday Fed Chair Jerome Powell is due to deliver semi-annual congressional testimony.

    Companies in focus

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  • Asia stocks hit by slide in China factory activity, jitters over U.S. debt-ceiling vote

    Asia stocks hit by slide in China factory activity, jitters over U.S. debt-ceiling vote

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    BEIJING (AP) — Asian stock markets sank Wednesday ahead of a vote by Congress on a deal to avert a government debt default, while a downturn in Chinese factory activity deepened, adding to signs global economic activity is weakening.

    Shanghai, Tokyo, Hong Kong and Sydney retreated. Oil prices declined.Wall Street’s benchmark S&P 500 index edged up less than 0.1% on Tuesday as President Joe Biden and U.S. House Speaker Kevin McCarthy tried to line up votes in support of their deal to allow the government to borrow more. Without…

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  • Asian stocks tumble after Credit Suisse takeover

    Asian stocks tumble after Credit Suisse takeover

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    BEIJING (AP) — Asian stock markets fell Monday after Swiss authorities arranged the takeover of troubled Credit Suisse amid fears of a global banking crisis ahead of a Federal Reserve meeting to decide on more possible interest rate hikes.

    Shanghai, Tokyo and Hong Kong declined. Oil prices retreated, and U.S. equity futures were tilting lower after initially rising on the takeover news.

    Swiss authorities on Sunday announced UBS would acquire its smaller rival as regulators try to ease fears about banks following the collapse of two U.S. lenders. Central banks announced coordinated efforts to stabilize lenders including a facility to borrow U.S. dollars if necessary.

    Investors worry banks are cracking under the strain of unexpectedly fast, large rate hikes over the past year to cool economic activity and inflation. That caused prices of bonds and other assets on their books to fall, fueling unease about the industry’s financial health.

    “Investors are waiting to see where the dust settles on the banking saga before making any bold moves,” Stephen Innes of SPI Asset Management said in a report.

    The Hang Seng
    HSI,
    -2.65%
    in Hong Kong lost 3% to 18,920 and the Nikkei 225
    NIK,
    -1.42%
    in Tokyo shed 1.2% to 26,990.25.

    The Shanghai Composite Index
    SHCOMP,
    -0.48%
    lost 0.2% to 3,241 after the Chinese central bank on Friday freed up additional money for lending by reducing the amount of money commercial are required to hold in reserve. Hong Kong shares of HSBC
    5,
    -6.23%
    dropped over 6%.

    The Kospi
    180721,
    -0.69%
    in Seoul retreated 0.6% to 2,382.03 and Sydney’s S&P-ASX 200
    XJO,
    -1.38%
    lost 1.4% to 6,900.00.

    India’s Sensex opened down 1.1% at 57,341.79. New Zealand and Southeast Asian markets also declined.

    The Swiss government said UBS will acquire Credit Suisse for almost $3.25 billion after a plan for the troubled lender to borrow as much as $54 billion from Switzerland’s central bank failed to reassure investors and customers.

    U.S. regulators have also sought to calm fears over threats to banking systems. The Federal Reserve said cash-short banks had borrowed about $300 billion from the Federal Reserve in the week up to Thursday.

    Separately, New York Community Bank
    NYCB,
    -4.66%
    agreed to buy a significant chunk of the failed Signature Bank in a $2.7 billion deal, the Federal Deposit Insurance Corp. said late Sunday. The FDIC said $60 billion in Signature Bank’s loans will remain in receivership and are expected to be sold off in time.

    Concerns persist about other lenders with shaky finances. Credit Suisse is among 30 institutions known as globally systemically important banks. Ahead of its takeover, Wall Street’s benchmark S&P 500 index
    SPX,
    -1.10%
    lost 1.1% on Friday to 3,916.64.

    Shares of First Republic Bank
    FRC,
    -32.80%
    sank nearly 33% to bring their plunge for the week to 71.8%.

    The Dow Jones Industrial Average
    DJIA,
    -1.19%
    lost 1.2% to 31,861.98. The Nasdaq Composite
    COMP,
    -0.74%
    fell 0.7% to 11,630.51. Dow futures
    YM00,
    -0.70%
    fell 0.3% early Monday, while S&P 500 futures
    ES00,
    -0.60%
    and Nasdaq-100 futures
    NQ00,
    -0.33%
    were steady.

    The unexpectedly large, fast rate hikes by the Fed and other central banks to cool inflation that is close to multi-decade highs have caused prices of bonds and other assets on their books to fall.

    Traders expect last week’s turmoil to push the Fed to limit a rate hike at its meeting this week to 0.25 percentage points. That would be the same as the previous increase and half the margin traders expected earlier.

    A survey released Friday by the University of Michigan showed inflation expectations among American consumers are falling. That matters to the Fed, which has said such expectations can feed into virtuous and vicious cycles.

    In energy markets, benchmark U.S. crude
    CL.1,
    -3.27%
    sank 93 cents to $64.81 in electronic trading on the New York Mercantile Exchange. The contract fell $1.61 on Friday to $66.74. Brent crude
    BRN00,
    -3.29%    ,
    the price basis for international oils, declined $1.05 cents to $71.92 per barrel in London. It retreated $1.73 the previous session to $72.97.

    The dollar
    DXY,
    +0.13%
    gained to 131.83 yen from Friday’s 131.67 yen. The euro
    EURUSD,
    -0.11%
    declined to $1.0676 from $1.0681.

    MarketWatch contributed to this report.

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  • Asian shares follow Wall Street lower after stronger-than-expected data

    Asian shares follow Wall Street lower after stronger-than-expected data

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    BANGKOK (AP) — Shares fell Monday in Asia after Wall Street benchmarks closed out their worst week since early December. U.S. futures edged higher while oil prices fell.

    Reports on inflation, the jobs market and retail spending have come in hotter than expected, leading analysts to raise forecasts for how high the Federal Reserve will have to take interest rates to slow the U.S. economy and cool inflation.

    Higher rates pressure business activity and investment prices. So far, they do not seem to be slowing growth as much as anticipated. The S&P 500 fell 1.1% Friday to cap its third straight loss.

    “It is becoming increasingly apparent that inflation, and associated inflation expectations and wage pressures, will not decline in a predictable linear manner,” Mizuho Bank said in a commentary. “Early trading on Monday suggests that risk aversion has been brought forward to Asian markets.”

    Tokyo’s Nikkei 225 index
    NIK,
    -0.11%
    edged 0.1% lower to 27,423 and the Kospi
    180721,
    -0.87%
    in Seoul gave up 0.8% to 2,402.

    In Hong Kong, the Hang Seng
    HSI,
    -0.26%
    lost 0.5% to 19,907 while the Shanghai Composite index
    SHCOMP,
    -0.28%
    was down 0.2% at 3,259. Australia’s S&P/ASX 200
    XJO,
    -1.12%
    shed 1.1% to 7,224.80.

    Bangkok was 0.3% lower while the Sensex in Mumbai dropped 0.7%.

    On Friday, the S&P 500
    SPX,
    -1.05%
    closed 1% lower at 3,970.04. The Dow Jones Industrial Average
    DJIA,
    -1.02%
    dropped 1% to 32,816.92, while the Nasdaq Composite
    COMP,
    -1.69%
    lost 1.7% to 11,394.94.

    Higher rates can drive down inflation, but they raise the risk of a recession.

    The measure of inflation preferred by the Fed, reported Friday, said prices were 4.7% higher in January than a year earlier, after ignoring costs for food and energy because they can swing more quickly than others. That was an acceleration from December’s inflation rate and was higher than economists’ expectations for 4.3%.

    It echoed other reports earlier in the month that showed inflation at both the consumer and wholesale levels was higher than expected in January.

    Other data Friday showed that consumer spending, the biggest piece of the economy, returned to growth in January, rising 1.8% from December. A separate reading on sentiment among consumers came in slightly stronger than earlier thought, while sales of new homes improved a bit more than expected.

    Such strength paired with the remarkably resilient job market raises the likelihood the economy might avoid a recession in the near term.

    Tech and high-growth stocks once again took the brunt of the pressure.

    Investments seen as the most expensive, riskiest or making their investors wait the longest for big growth are among the most vulnerable to higher rates.

    Traders are increasing bets on the Fed raising its benchmark rate to at least 5.25% and keeping it that high through the end of the year. It’s currently in a range of 4.50% to 4.75%, and it was at virtually zero a year ago.

    Expectations for a firmer Fed have caused yields in the Treasury market to shoot higher this month, and they climbed further Friday.

    The yield on the 10-year Treasury
    TMUBMUSD10Y,
    3.928%
    was steady at 3.94%, up from 3.89% late Thursday. It helps set rates for mortgages and other important loans. The two-year yield
    TMUBMUSD02Y,
    4.815%    ,
    which moves more on expectations for the Fed, rose to 4.79% from 4.71% and is near its highest level since 2007.

    In other trading Monday, U.S. benchmark crude oil
    CL.1,
    +0.20%
    lost 56 cents to $75.75 per barrel in electronic trading on the New York Mercantile Exchange. It gained 93 cents to $76.32 per barrel. Brent crude oil
    BRN00,
    +0.10%    ,
    the pricing basis for international trading, shed 65 cents to $82.51 per barrel.

    The dollar
    DXY,
    -0.12%
    rose to 136.41 Japanese yen
    USDJPY,
    -0.30%
    from 136.45 yen. The euro
    EURUSD,
    +0.12%
    slipped to $1.0533 from $1.0549.

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  • Dow down by more than 500 points as Fed officials point to more rate hikes, China protests rattle markets

    Dow down by more than 500 points as Fed officials point to more rate hikes, China protests rattle markets

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    U.S. stocks tumbled on Monday as protests in China raised the risks to global growth and Federal Reserve policy makers said more interest-rate increases are needed to control inflation.

    How stocks are trading
    • The Dow Jones Industrial Average was down 523 points, or 1.5%, at 33,824, near its session low.

    • The S&P 500
      SPX,
      -1.65%
      retreated 68 points, or 1.7%, to 3,958.

    • The Nasdaq Composite shed 195 points, or 1.7%, dropping to 11,031.

    U.S. stocks had notched weekly gains last week for the second time in three weeks. The Dow rose 1.8%, the S&P 500 advanced 1.5% and the Nasdaq gained 0.7%.

    What’s driving markets

    Wall Street started the week in a downbeat mood as traders absorbed the impact of unrest in China and assessed interest-rate commentary by a pair of Fed officials on Monday.

    St. Louis Fed President James Bullard told MarketWatch that he favors more aggressive interest-rate hikes to contain inflation, and that the central bank will likely need to keep interest rates above 5% into 2024. Meanwhile, his colleague John Williams, president of the New York Fed, said that U.S. unemployment could climb to as high as 5% next year, versus October’s rate of 3.7%, in response to the central bank’s series of rate hikes.

    Overseas, Hong Kong’s Hang Seng Index
    HSI,
    -1.57%
    closed down by 1.6% and most equity indexes across Asia also fell, with the exception of India’s, on concerns about unrest in China. Those concerns also spilled over into commodity markets, where West Texas Intermediate crude for January delivery
    CLF23,
    +0.93%
     briefly fell to less than $74 per barrel before recovering and settling at $77.24 a barrel on the New York Mercantile Exchange. Meanwhile, copper prices HG00 were off 0.9% at $3.594 per pound.

    “What people are worried about is the potential for protests in China to spread and whether the population is reaching its breaking point,” said Derek Tang, an economist at Monetary Policy Analytics in Washington. “At the same time, Fed speak is ramping up and the message is there’s more hikes to come. So investors aren’t finding relief.”

    Signs that economic activity in China will continue to be disrupted by the protests or by additional anti-COVID measures will likely continue to weigh on commodity prices, analysts said. Meanwhile, concerns about global growth helped to support government bond markets earlier on Monday, when the yield on the 10-year note
    TMUBMUSD10Y,
    3.693%
    briefly traded at its lowest level since October.

    The unprecedented waves of protest in China “have caused ripples of unease across financial markets, as worries mount about repercussions for the world’s second-largest economy,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. “As demonstrations spread across the country from Beijing to Xinjiang and Shanghai, reflecting rising anger about the zero-Covid policy, a sustained recovery in demand across the vast country appears even further away.”

    But the news wasn’t all bad: Reports of strong online Black Friday sales helped boost shares of Amazon.com Inc.
    AMZN,
    +0.29%    ,
    which were up 0.6%.

    Investors can expect more information about the health of the U.S. economy in what’s shaping up to be a busy week for U.S. economic data: Later this week, investors will receive the ADP employment report followed by the November jobs report. Revised data on third-quarter gross domestic product is due on Wednesday, along with the Fed’s Beige Book report. Federal Reserve chair Jerome Powell is set to speak publicly on Wednesday, and a closely watched gauge of inflation is due on Thursday.

    Read: ‘We see major stock markets plunging 25% from levels somewhat above today’s,’ Deutsche Bank says

    Single-stock movers

    — Jamie Chisholm contributed to this article.

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  • Many investors are betting on an inflation peak. Here’s why a former hedge-fund manager says they’re wrong.

    Many investors are betting on an inflation peak. Here’s why a former hedge-fund manager says they’re wrong.

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    Investors are waking up to big trouble in big China. Stock futures and oil prices are falling after angry anti-COVID zero protests swept the country.

    “This is a sudden powerful new distraction for markets when this week was supposed to be about incoming U.S. data,” sum up strategists at Saxo Bank. They say watch companies exposed to China, “given forward earnings are likely to be downgraded following further China lockdowns and protests.” 

    Before China grabbed the spotlight, holiday weekend sales, jobs and inflation data that due this week, as well as remarks by Fed Chairman Jerome Powell were the big focus.

    Other questions are now swirling. Will China-related falls in oil prices lend to the peak inflation theory? And what about China’s post-COVID economic rebirth?

    Onto our call of the day, which says it’s time to short long bonds because of sticky food inflation — thanks to China. It comes from Russell Clark, a former hedge-fund manager who has spent the last 20 years focusing on that market, macro and short selling. 

    He notes investors have been scooping up the the iShares 20 years+ Treasury Bond ETF
    TLT,
    -0.34%    ,
    a liquid exchange-traded fund that buys long-dated bonds, even as with U.S. inflation hovering at 1970 highs.

    “The reason that people are getting bullish bonds I believe is that the yield curve has inverted. And every time that has happened, you have a recession and you want to get out of equities and into bonds,” says Clark. A yield curve inversion occurs when long-term interest rates drop below short term rates. The inversion of 2 and 10-year Treasury yields is at its steepest since the 1980s.

    Clues may lie in Japan’s poorly performing bond market. “Not only has it been prescient in leading the U.S. bond yields lower from 1999 onward, in 2020 the JGB market was also prescient in signaling the future U.S. treasury sell off,” he says.


    Russell Clark

    And what Japan is likely seeing that U.S. investors aren’t right now is China-driven food inflation. That’s something the Fed will find it tough to ignore, he said.

    Since the since the 1980s, food commodity prices have followed raw commodity prices higher, If the Fed wants to work that down, it will raise interest rates. For example, falling natural-gas prices
    NG00,
    -3.37%
    would help ease fertilizer costs for farmers.


    Russell Clark

    Clark points out that China is the world’s biggest food importer, with much higher prices than the U.S.

    “Pork, which is the most consumed meat in China, is now 3 times more expensive than the U.S. market, and has recently doubled in price. As Japan is also a large importer of pork, perhaps this was the reason the JGB market sold off before the U.S.,” he said.

    Beef is also a major import for China, and yes, prices are much higher than that of the U.S.

    “In essence, I am saying that China is exporting food inflation to the rest of the world, and I don’t see that ending at the moment. JGBs seem to agree – and when I look at the index value of US Food CPI on a log basis, I keep thinking that is says interest rates are going higher not lower,” said Clark.

    He sees food inflation looking secular, rather than cyclical, due to the demands of an increasingly urbanized China. “Secular food inflation implies POLITICAL pressure to have higher interest rates. US treasuries look a short to me, just as everyone has gotten long,” he said.

    The markets

    Stock futures
    ES00,
    -0.73%

    YM00,
    -0.54%

    NQ00,
    -0.72%
    are falling, and Treasury yields
    TMUBMUSD10Y,
    3.684%

    TMUBMUSD02Y,
    4.467%
    and oil
    CL.1,
    -3.12%
    also are falling. The Japanese yen
    USDJPY,
    -0.61%
    is seeing some safe-haven bids. The Hong Kong Hang Seng Index
    HSI,
    -1.57%
    closed down 1.5%.

    For more market updates plus actionable trade ideas for stocks, options and crypto, subscribe to MarketDiem by Investor’s Business Daily.

    The buzz

    An apartment-building fire in a locked-down city that killed 10 appeared to spark protests across China, calling for the President Xi Jinping to step down and zero-COVID policies to stop. A BBC reporter was arrested and beaten. Meanwhile, lockdowns mean China farmers are destroying crops they can’t sell.

    And similar unrest at China’s Zhengzhou Foxconn
    2317,
    -0.50%
    factory is expected to cause a shortfall of 6 million Apple
    AAPL,
    -1.96%
    iPhone Pros this year.

    Pinduoduo shares
    PDD,
    -1.44%
    are soaring after the China-based mobile marketplace reported profit and revenue beats.

    MGM Resorts 
    MGM,
    -0.42%    ,
    Las Vegas Sands 
    LVS,
    +0.26%
    and Wynn Resorts 
    WYNN,
    -0.57%
    higher in premarket after Macao tentatively renewed their casino licenses.

    Retailers are in focus after Black Friday online sales topped a record $9 billion. That’s as some wonder if Cyber Monday is still a thing.

    St. Louis Fed President James Bullard will sit down for an interview with MarketWatch on Monday, at 12 noon Eastern. New York Fed President John Williams address the Economic Club of New York at the same time. Fed’s Powell will speak on Wednesday, along with several other Fed officials this week.

    A busy data week starts Tuesday with home-price indexes and consumer confidence data. GDP, the PCE price index for October — a favored gauge of the Federal Reserve and November employment data are also on tap this week.

    Best of the web

    ‘I believe the economy is the biggest bubble in world history,’ warns ‘Rich Dad, Poor Dad’s Robert Kiyosaki.

    Iran was calling for the U.S. to be expelled from the Qatar World Cup.

    Lab study shows next COVID strain will be more deadly.

    The tickers

    These were the top-searched tickers on MarketWatch as of 6 a.m. Eastern:

    Ticker

    		 Security name
    TSLA,
    -0.19%         		Tesla
    GME,
    -1.99%         		GameStop
    AMC,
    -1.70%         		AMC Entertainment
    AAPL,
    -1.96%         		Apple
    COSM,
    +34.06%         		Cosmos Holdings
    AMZN,
    -0.76%         		Amazon.com
    BBBY,
    -2.70%         		Bed Bath & Beyond
    MULN,
    -2.39%         		Mullen Automotive
    APE,
    +0.83%         		AMC Entertainment Holdings preferred shares
    DWAC,
    +6.44%         		Digital World Acquisition Corp.
    Random reads

    Chinese woman on a mission to visit everyone else’s lonely elderly relatives.

    ‘Gaslighting’ is Merriam Webster’s word of the year. No, really.

    Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern.

    Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton

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  • Chinese travel, consumption stocks rally as Beijing eases COVID rules

    Chinese travel, consumption stocks rally as Beijing eases COVID rules

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    Shares of Chinese travel and consumer companies gained ground in Hong Kong after Beijing eased some Covid-19 restrictions, improving the outlook for sectors directly hit by the pandemic and the broader economic recovery.

    In Friday afternoon trade, the Hang Seng China Enterprises Index
    160462,
    +7.98%
    advanced 7.6%, while the city’s benchmark Hang Seng Index
    HSI,
    +7.51%
    jumped 7.1% to 17221.43, recovering to levels last seen a month ago. The benchmark index would mark its largest one-day gain since mid-March if it closes at current levels.

    China’s three major airlines, Air China Ltd.
    601111,
    -3.11%    ,
    China Southern Airlines Co.
    600029,
    +0.13%
    and China Eastern Airlines Corp.
    600115,
    +1.14%    ,
    added between 2.2% and 5.1%, while travel retailer China Tourism Group Duty Free Corp.
    601888,
    +3.65%
    climbed 7.1%.

    Broader consumer-related sectors also strengthened, amid hopes that less stringent rules could help revive consumption. E-commerce platforms Alibaba Group Holding Ltd.
    BABA,
    +7.60%

    9988,
    +11.51%
    and JD.com Inc.
    JD,
    +8.41%

    9618,
    +16.22%
    jumped 11% and 16%, respectively, while restaurant operator Haidilao International Holding Ltd.
    6862,
    +5.21%
    climbed 4.7%.

    China said Friday that it will shorten the quarantine period for close contacts of COVID cases and travelers to the country, among other policy tweaks. But the government also said it will stick to its zero-COVID policy.

    Friday’s market upturn came on the back of U.S. stocks’ biggest rally in two years, after October inflation data was weaker than expected, lifting expectations of less aggressive interest-rate increases by the Federal Reserve.

    Write to Clarence Leong at clarence.leong@wsj.com

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  • Hong Kong stocks suffer worst single-day rout since 2008 as Xi consolidates power

    Hong Kong stocks suffer worst single-day rout since 2008 as Xi consolidates power

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    Hong Kong stocks suffered their worst single session since the 2008 financial crisis after Chinese leader Xi Jinping tightened his grip on power.

    The Hang Seng
    HSI,
    -6.36%
    ended more than 6% lower to a new 13-year low, with tech giants including JD.com
    9618,
    -13.17%

    JD,
    -0.02%    ,
    Baidu
    9888,
    -12.20%

    BIDU,
    -2.29%    ,
    Tencent
    700,
    -11.43%
    and Alibaba
    9988,
    -11.42%

    BABA,
    +0.22%
    dropping between 11% and 13% each.

    The local Shanghai Composite
    SHCOMP,
    -2.02%
    index fell a less dramatic 2%.

    Over the weekend, the 69-year-old Xi secured his third term as general secretary of the Chinese Communist Party. Reporters captured video of former Chinese President Hu Jintao getting escorted out of the closing ceremony. Four of the seven standing committee members were replaced, all of whom are at least 60 years old.

    Analysts at Goldman Sachs say most of the new appointees worked with Xi at earlier stages of their careers. “We note that incoming leaders could arguably be more focused on ideological and political subjects while the retiring policymakers appear more economy/market-oriented,” they said.

    They added that for valuations to improve, more clarity on the zero COVID policy, stabilization of the property markets, and de-escalation of both cross-straits and U.S.-China tensions would be needed.

    China also reported delayed data, saying its economy grew at a 3.9% year-over-year rate in the third quarter, up from 0.4% in the second quarter.

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