New | French air strikes in Syria fire up Hong Kong stocks
Oil shares rise with mounting geopolitical worries
Hong Kong stocks rebounded on Tuesday from previous day’s losses as investor sentiment recovered from Paris lows, but markets on mainland China retreated as investors took profit.
Hong Kong’s benchmark Hang Seng Index closed 1.15 per cent, or 253.43 points, higher at 22,264.25, led by a strong rally in oil stocks. The Hang Seng China Enterprises Index added 0.95 per cent, or 94.73 points, to close at 10,218.83.
China’s largest offshore oil producer CNOOC finished up by 3.2 per cent at HK$8.36, making it the biggest winner among blue chips on Tuesday. PetroChina, the country’s largest oil and gas supplier, rose 2 per cent to HK$5.59. Refining giant Sinopec also edged up 0.61 per cent to HK$4.99. Kunlun Energy pushed up 2.71 per cent to HK$6.06.
Oil prices have been on the up since Monday as investors fear oil supplies could be affected as a result of French airstrikes on Islamic State targets in Syria. On Monday, West Texas Intermediate (WTI) crude for December delivery climbed 2.5 per cent US$41.74. The biggest advance in two weeks for the gauge came after a Platts survey found oil production from the Organisation of the Petroleum Exporting Countries (Opec) dropped for a third straight month in October.
“Trading (of WTI) was probably affected by the French action in Syria,” said Evan Lucas, an analyst for IG Group.
The spike in WTI followed an 8 per cent drop last week, the steepest weekly decline for the index in three months. In London, January Brent crude on the ICE Futures Europe increased 0.2 per cent to US$44.56 a barrel.
In early trading on Tuesday, WTI crude increased further to US$41.86 a barrel. Brent crude futures rose to US$44.72.
Mainland Chinese markets saw the gains from a sharp rally in the morning session wiped out in the afternoon as investors took profit.
Gerry Alfonso, a director at Shenyin Wanguo Securities, warned of more volatility as more details emerge of the move to resume initial public offerings (IPOs).
Aerospace and defence stocks were the top performers of the day as geopolitical tensions mount after the terror attacks in Paris. AVIC Aviation Engine Corp, a major manufacturer and distributer of aircraft engines, ended 3.98 per cent higher at 53 yuan in Shanghai.
Securities stocks retreated after a strong rally in the morning but still closed slightly higher. New data showed margin financing balance in China increased to a three-month high of around 1.18 trillion yuan as of Monday, up for a 10th straight day.
Citic Securities, mainland China’s biggest brokerage company whose top executives have been put under investigation, saw its stock close 1.56 per cent higher at 20.21 yuan in Shanghai and 1.76 per cent higher at HK$18.52 in Hong Kong. It announced the retirement of current chairman Wang Dongming on Tuesday.
Apart from the Shanghai Composite Index, which lost 0.06 per cent to close at 3,604.80, the CSI 300 ended 0.15 per cent lower at 3,758.39. The Shenzhen Composite Index fell 0.88 per cent to 2,231.18, while the Nasdaq-style ChiNext eased 2.86 per cent to 2,717.05.
Onshore yuan closed at 6.3771 against the US dollar, weaker by 0.11 per cent. The offshore yuan was trading at 6.4022 as of 4.40pm.
Additional reporting by Enoch Yiu
