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Keeping an underweight position in favour of ‘home bias’ could be a drag on performance, the private bank says. Although China has lagged this year, economic recovery is durable and ‘the tide could be turning.’

Hong Kong stocks gave up their initial gains triggered by an agreement between US lawmakers to raise the US debt ceiling and avert a default, as investors worried about demand conditions in China following downbeat industrial profits data.

Chinese consumer prices rose by 0.1 per cent year on year in April, the least in more than two years, showing post-Covid recovery remains sluggish.

Hong Kong stocks dropped as investors are still not convinced about the strength of China’s economic recovery despite a better-than-expected 8.5 per cent jump in exports in April.

Traders have stepped up bets on US rate cuts soon after the Fed hinted at a pause in its policy tightening drive. Concerns are growing that US bank failures and recession will infect the global economy.

Saxo Capital Markets says its clients are still holding a large chunk of assets in cash because they are unsure about the market trajectory and China’s recovery and policy outlook.

Stocks surrender an early rally as concerns about China’s recovery outlook overshadow hopes for a rebound in holiday spending. HSBC advances before its first-quarter report card later today.

Weak confidence and fears of policy tightening among local investors could undermine bullish bets by their offshore peers, who have ploughed US$28 billion of fresh funds into yuan-denominated stocks this year.

Stocks struggle to extend Wednesday’s rebound as more companies prepare to report their first-quarter earnings. Some onshore fund managers lack confidence and worry about policy tightening, Goldman says.

Local stocks recover from a three-day sell-off, lifting the benchmark index from a four-week low.Tencent leads winners on buy-back speculation, while BYD and HKEX gain on brighter business outlook.