New | Hong Kong stocks knocked lower in cautious, risk-off mood on Paris attacks
Hong Kong’s Hang Seng under broad selling pressure in wake of Paris terror attacks
Hong Kong stocks clawed back sharp losses at Monday’s open, but still settled the session with a sizeable loss, as investors digested the impact on financial markets of Friday’s attacks in Paris and China’s latest tightening of margin trading rules.
Hong Kong’s Hang Seng Index fell 1.72 per cent, or 385.32 points, to close at 22,010.82 , moving off an opening low of 21,958.28. The Hang Seng China Enterprises Index, which tracks Hong Kong-listed mainland Chinese firms, dropped 1.99 per cent to 9,978.70.
“Hong Kong and mainland stock markets are likely to continue to perform differently in the rest of this week,” said Ben Kwong Man-bun, executive director and head of research of KGI Asia.
“Shanghai and Shenzhen stock markets are mainly traded by mainlanders and hence not so much affected by international event. Hong Kong is more traded by international investors and is likely to continue to be hurt by the aftermath of the attacks in Paris,” Kwong said.
Total market turnover for Hong Kong reached HK$76.9 billion, compared with a daily turnover of HK$83 billion on Friday.
The Shanghai Composite Index closed 0.73 per cent higher to 3,606.96, reversing from a weaker open. The large-cap CSI300 ws up 0.48 per cent to 3,764.13.
Shenzhen stocks also reversed from initial weakness. The Shenzhen Composite Index rose 2.1 per cent to close on Monday at 2,250.98 after once dipped 0.9 per cent in the morning. ChiNext Index was up 3.2 per cent to 2,797.16.
Airline stocks fell heavily on concerns that passenger demand may suffer in the wake of the Paris terror attacks. In Hong Kong, Air China dropped 3.5 per cent to HK$6.56, and Cathay Pacific Airways fell 2.7 per cent to HK$14.58.
In Shanghai and Shenzhen stock exchanges announced Friday that from Monday they would raise margin requirements from 50 per cent to 100 per cent in an attempt to “avoid systemic risks and promote healthy market development”.
Kwong said it was logical that margin tightening did not negatively affect the mainland market performance. “After many rounds of tightening in the past few months, the margin financing now in China is at a normal level,” he said.
Kwong said the mainland markets are benefited from the announcement by IMF chief Christine Lagarde that she will be recommending the inclusion of the yuan in the Special Drawing Rights basket of currencies.
Listed brokerage however were knocked lower by news of the margin change. Citic Securities, the country’s largest securities firm, tumbled 4.2 per cent to HK$18.20 in Hong Kong. Smaller rival Haitong Securities fell 4.8 per cent in Hong Kong and lost 1.7 per cent to close at 16.83 yuan in Shanghai.
However, defence and information security-related stocks surged, after China’s Ministry of Public Security pledged Sunday to enhance anti-terrorism intelligence analysis and beef up the nation’s intelligence warning system.
Shenzhen-listed surveillance system supplier Shenzhen Infinova, electric machine maker Anhui Xinlong Electrical, and office information system service provider Beijing Lanxum Technology were among shares rising by the 10 per cent limit.
In the currencies, the offshore yuan eased to a fresh six-week low of 6.4208 in midday trade. By late afternoon, the dollar was buying 6.3968 yuan.
