image

Stocks

Hong Kong stocks tumble, led by Tencent, as regulator probes social media platforms

Hang Seng slides 2.5pc for the week – the biggest decline this year. China’s internet watchdog accuses WeChat, Baidu and Sina of violating cyber security laws

PUBLISHED : Friday, 11 August, 2017, 9:12am
UPDATED : Friday, 11 August, 2017, 10:59pm

Hong Kong stocks registered their worse weekly decline this year on Friday, after escalating tensions between the US and North Korea caused a slump on Wall Street overnight.

The market also took a huge knock from technology giant Tencent, after news emerged that its successful messaging app, WeChat, and two other Chinese tech heavyweights are being probed by the government.

The Hang Seng Index slid 2.0 per cent or 560.49 points at 26,883.51 on Friday, or 2.5 per cent for the week, the biggest decline this year. Turnover was HK$139.37 billion (US$18.83 billion). 1,517 companies declined with only 272 shares up.

The Hang Seng China Enterprises Index also fell 1.9 per cent or 209.23 points to 10,572.97.

“The fact the market dropped across all sectors suggests this correction may last for at least another week, with expectations of prolonged tensions between the US and North Korea,” Ben Kwong Man-bun, director of KGI Asia said. “The Hang Seng Index may head towards about the 2,6000 level.”

The fact the market dropped across all sectors suggests this correction may last for at least another week, with expectations of prolonged tensions between the US and North Korea
Ben Kwong Man-bun, director of KGI Asia

Tencent tumbled 4.9 per cent to HK$310.6 as China’s internet watchdog announced it is probing WeChat as well as social media platforms backed by Baidu and Sina.

It accused the three of violating cyber security laws because their users have “spread information deemed a threat to the national security, including pornography, rumours and violence”.

Declines in financials were led by China Life which was lower 2.9 per cent to HK$23.55 and China Construction Bank which fell 1.6 per cent at HK$6.34.

China’s largest aluminium producer was among the biggest loser, tumbling 8.9 per cent to HK$5.19. Coal mining giant China Shenhua also slid 4.4 per cent to HK$19.1. Geely Auto skidding 4.5 per cent to HK$18.42. Apple supplier AAC Tech had 3.8 per cent peeled from its value, to HK$106.7.

Wanda Hotel Development rose for a second day, surging 9 per cent to HK$1.52. Its share price skyrocketed 40 per cent on Thursday after it said it would buy property and tourism assets from Dalian Wanda Group chairman Wang Jianlin.

Among stocks bucking the downward trend were China’s largest producer of sanitary napkins Hengan International, which added 0.6 per cent to HK$61.55, and food company Want Want China, which gained 4.2 per cent to HK$5.52.

In the mainland, the Shanghai Composite Index shed 1.6 per cent, or 53.21 points, to 3,208.54, while the Shenzhen Composite Index lost 1.6 per cent, or 30.0 points, to 1,842.6. The Nasdaq-style ChiNext also dropped 0.7 per cent to 1,742.14.

Shares in the mining, financials, and manufacturing sectors led losses.

Overnight on Wall Street, the escalating war of words between the US and North Korea battered financial markets. President Donald Trump said on Thursday his “fire and fury” warning towards Pyongyang had not been “tough enough”.

The Dow Jones Industrial Average fell for a third straight session on Thursday, shedding 204.7 points to 21,844, as investors headed for haven assets such as gold and the yen.

Equities in Asia mirrored the US slump, with the Nikkei 225 in Tokyo losing 0.05 per cent to 19,729.7, and the Kospi in South Korea dropping 1.6 per cent, or 37 points, to 2,321.

The S&P/ASX 200 in Australia fell 1.3 per cent, sliding to 5,687.6.

business-article-page