HSI Up But Chinese Stocks Fall On GDP Data

Hong Kong stocks rose on Monday on hopes for a new US stimulus package but shares across the border lost ground due to slower-than-expected economic growth on the mainland.

In Hong Kong, the Hang Seng Index was up more than 300 points in the morning before losing some of those gains following the mainland's third-quarter GDP announcement.

The local benchmark closed 155 points or 0.6 percent higher, at 24,542.

Turnover was HK$122.8 billion.

Banks outperformed, with ICBC jumping 3.6 percent, HSBC up 2.5 percent and China Construction Bank gaining 1.7 percent.

Xiaomi plunged 4 percent to become the biggest blue-chip loser of the day after Citibank downgraded the smartphone maker and cut its target price.

Markets across the border reversed course and sank into the red after the mainland GDP figures came in below analysts' forecast. The Shanghai Composite Index lost 0.7 percent while the blue-chip CSI-300 Index skidded 0.8 percent.

The mainland economy posted a 4.9 percent growth in the July-to-September quarter, falling short of a forecast of 5.2 percent. Consumer spending and industrial production returned to pre-pandemic levels, but the weaker-than-expected headline growth suggested persistent risks.

Still, ING's Chief Greater China economist, Iris Pang, said she's upbeat with the economic outlook.

"We have strong industrial production, not because of particularly strong export demand but also very strong domestic demand. This is, I think, the first time I've seen in over 15 years that domestic demand has override external demand in the manufacturing sector," she said.

"For the fourth-quarter forecast, we have already revised upward to 5.5 percent, so it will be better than this quarter, 4.9 percent. The main growth is still consumption, but there will be more growth from investment in the medical sector and also the technology sector."

Markets elsewhere in the region were buoyed by optimism that US lawmakers could reach an agreement on a coronavirus support package.

The Nikkei in Japan jumped more than 1.1 percent as investors went on bargain-hunting.

Seoul's Kospi added 0.2 percent. Sydney advanced 0.9 percent. Taiwan surged 1.2 percent.

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