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Hong Kong stocks trail Asian markets lower; China rises on stimulus hopes

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SHANGHAI — Hong Kong stocks trailed other Asian markets lower on Thursday amid a bleak outlook for global growth, but Chinese stocks gained on bets that Beijing will roll out more stimulus to revive an economy affected by coronaviruses.

** The Hang Seng Index fell 1.5% to 19,650.77 in morning trade, while the Hong Kong Chinese Companies Index lost 1.3% to 6,773.42.

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**In mainland China, the bluechip CSI300 index rose 0.1% to 4,082.69, while the Shanghai Composite index gained 0.2% to 3,209.87.

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** MSCI’s broadest index of Asia-Pacific stocks outside Japan fell 1.5% amid further signs of economic weakness.

** Regional PMIs for South Korea, Japan and China all pointed to slowing global economic activity, high inflation, rising interest rates and war in Ukraine having wreaked havoc.

** Although China’s inflation is modest and the country’s interest rates continue to decline, further outbreaks of COVID-19 and a worsening housing crisis threaten the nascent economic recovery.

** Southern China’s tech hub Shenzhen tightened COVID-19 restrictions as cases continued to rise on Thursday, while Chengdu – the capital of southwestern Sichuan province – announced that she would conduct mass COVID-19 testing from Thursday to Sunday.

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** “With virus disruptions spreading again, foreign demand cooling, the real estate sector still in a downward spiral and stimulus failing to gain traction, there is little reason to s ‘expect a near-term turnaround,’ wrote Julian Evans-Pritchard, senior China economist at Capital Economics.

**Underlining the urgency of stimulating the economy, China said it would release detailed steps for recently announced economic policy measures in early September.

**China’s real estate and energy shares surged on Thursday as investors bet on fresh policy support.

** “The road to recovery will be uneven,” said Ting Lu, chief China economist, Nomura. “We expect more policy easing and stimulus measures.”

**But most sectors in Hong Kong fell, with consumers and businesses among the biggest decliners. (Reporting by Shanghai Newsroom; Editing by Rashmi Aich)



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