China Markets Live - Hong Kong stocks fall to lowest close in three years; China bucks weak trend
Offshore yuan strengthens as PBOC plans to raise reserve requirement ratios on some yuan clearing banks to curb speculation
Welcome to the SCMP’s live China markets. The intense volatility in Chinese markets into 2016 due to the implementation of the circuit breaker has roiled world financial markets. Investors are increasingly focused on the broader question of how this episode might affect the wider economy of the country. We’ll bring you the key levels, trading statements, price action and other developments as they happen.
Here is a summary of market movements so far today:
- Hong Kong’s Hang Seng loses 1.4 per cent to close at lowest level since September 2012
- Shanghai Composite erases early losses and ends up 0.5 per cent
- Shenzhen Composite closes 1.9 per cent higher
What to watch tomorrow:
China’s GDP numbers are due Tuesday at 10 am Beijing time, with 2015 GDP growth expected to reach 6.9 per cent.
4:55 pm By Xie Yu
Lufax, China’s biggest online peer-to-peer lending platform controlled by Ping An Insurance, announced Monday it just raised more than US$1.21 billion in its latest fundraising round. The company is valued at US$18.5 billion currently.
Lufax chairman Ji Kuisheng also said the company could go public in the domestic market.
4:36 pm By Laura He
Crude prices extended the sharp fall from last week on Monday, as February WTI futures shed 1.4 per cent to US$29.03 a barrel. March Brent briefly slid below US$28, trading at US$27.67 a barrel, before bouncing back slightly to US$28.5 a barrel. It was still down 1.6 per cent from the prior session.
4:31 pm By Laura He
Elsewhere in Asia, most major stock markets lost ground on Monday, as Japan’s Nikkei 225 dropped 1.1 per cent to close at 16,955.57 and Australia’s S&P/ASX 200 finished 0.7 per cent lower at 4,858.70. India’s Sensex fell 0.3 per cent to 24,388.38 in afternoon session.
4:15 pm By Xie Yu
Hong Kong stock market closed lower amid soft regional markets, tracking weakness in US markets on Friday. The benchmark Hang Seng Index lost 1.41 per cent, or 275.32 points, to 19,245.45. The H-share Index, which tracks mainland-based companies, dropped 1.13 per cent, or 93.17 points, to 8,143.11.
Below is the one-day chart of Hong Kong stock indexes. Hang Seng Index (yellow line), H-share index (purple line). The percentage at the end show the difference from the opening, not the previous close. Click to enlarge the chart.
3:34 pm By Xie Yu
Three companies listed in Shenzhen and Shanghai became the first batch that announced their annual reports, including Anxin Trust, CASIN Guoxing Property Development, and Myhome Real Estate Development.
Among them, Myhome Real Estate reported 428 million yuan in net profit for fiscal 2015, up 468.5 per cent year on year. The company also said it would pay 63.98 million yuan for dividends.
3:15 pm By Xie Yu
China’s benchmark Shanghai Composite Index closed up 0.47 per cent, or 13.52 points to 2,914.49. The CSI300 Index rose 0.41 per cent, or 12.70 points, to 3,131.43.
The Shenzhen Composite Index added 1.91 per cent, or 34.22 points to 1,830.35. The Nasdaq-style ChiNext Index gained 2.94 per cent, or 62.08 points to 2,174.98.
Below is the daily chart for Shanghai and Shenzhen stock index. Shanghai Composite Index (yellow), CS1300 Index (purple), Shenzhen Composite Index (green) and ChiNext (blue). The percentage at the end of the chart represents the difference from the opening, not from previous close. Click to enlarge chart.
3:05 pm By Laura He
Who to blame for China’s stock market volatility?
“Immature investors”, “flawed market mechanisms”, and “improper supervision” are among the major culprits for the turmoil in Chinese markets, Xiao Gang, the country’s chief securities regulator , said in an internal speech at a national work meeting of Chinese securities officials over the weekend.
The transcript of the speech has also been published on the official website of China Securities Regulatory Commission. Here is the statement.
2:06 pm By Xie Yu
Hong Kong stocks narrowed losses in early afternoon. The benchmark Hang Seng Index traded down 0.85 per cent, or 166.67 points, to 19,354.10. The H-share Index, tracking mainland based companies, fell 0.39 per cent,or 31.90 points to 8,204.38.
2:06 pm By Xie Yu
China’s benchmark Shanghai Composite Index expanded the gain in the afternoon session, rising 0.96 per cent, or 27.98 points, at 2,928.95. The CSI300 Index advanced 0.94 per cent, or 29.37 points to 3,148.10.
The Shenzhen Composite Index climbed 2.48 per cent, or 44.63 points to 1,840.76. The Nasdaq-style ChiNext Index jumped 3.81 per cent, or 80.51 points to 2,193.41.
12:32 pm By Laura He
Below is a chart showing that China’s benchmark Shanghai Composite has fallen 20 per cent from its recent high on Dec.22, marking a return to bear market territory. The index is down 18 per cent so far in 2016. Click to enlarge the chart.
12:14 pm By Jessie Lau
The Hang Seng Index closed lower at 19,304.76, down 1.11 per cent or 216.01 points, and the H-share index that tracks mainland companies listed in Hong Kong fell by 0.57 per cent or 47.01 points to finish at 8,189.27.
Below is the midday chart of the Hong Kong market. Hang Seng Index (yellow), H-share index (purple). The percentage at the end show the differences from the opening, not the previous close. Click to enlarge the chart.
12:11 pm By Laura He
China does not need a “premature” shift to services to rebalance its economy, but instead needs continued industrialisation to lift its labour productivity and technology, HSBC said Monday.
“Many still argue that China needs to rebalance its economy from investment to consumption to sustain high growth. However, what matters for sustained growth in the long run is productivity, not the structure of aggregate demand,” HSBC economists John Zhu and Qu Hongbin said in research note.
Although China is a very large economy, productivity per worker is still low due to a lesser stock of capital.
“Given China’s current stage of development, more investment will be needed, not less,” they said.
On the other side, the recent increase of the services sector to more than half of China’s GDP was more due to “a cyclical decline in industry” than to “a structural improvement in services productivity”.
“A deliberate shift away from manufacturing would in fact remove an important mechanism of productivity catch-up,” HSBC said.
“China needs industrial upgrading, and not a premature shift from industry to services,” the bank added.
11:37 am By Jessie Lau
The Shanghai Composite Index closed the morning session at 2,903.54, up 0.09 per cent or 2.57 points. The large-cap CSI300 index finished the morning trade at 3,123.61, up 0.16 per cent or 4.88 points.
Meantime, the Shenzhen Composite rose 1.13 per cent or 20.33 points to close at 1,816.46 by mid-session. The Nasdaq-style ChiNext Index gained 2.43 per cent or 51.39 points to close at 2,164.29.
Below is the midday chart for the mainland market. Shanghai Composite Index (yellow), Shenzhen Composite Index (green), CS1300 Index (purple) and ChiNext (blue). The percentage at the end of the chart represents the different from the opening, not from previous close. Click to enlarge the chart.
11:33 am By Enoch Yiu
Offshore yuan traded at 6.5870, stronger by 0.42 per cent. This came after a Reuter report that said the PBOC is preparing to raise the reserve requirement ratio (RRR) for yuan deposits placed in yuan clearing banks from January 25, in its latest bid to stem currency speculators.
The aggressive intervention of the PBOC in the Hong Kong offshore yuan market has led the offshore yuan higher by 1.01 per cent last week, compared with a 1.75 per cent depreciation in the previous week.
11:30 am By Laura He
The turmoil in China’s stock markets, which have fallen back into the bear market territory, is set to dominate the discussions of world leaders in the upcoming World Economic Forum in Davos, Swiss this week.
So what triggered such a bad start to the year? WEF cited the worrying slowdown in the Chinese economy.
— World Economic Forum (@wef) January 17, 2016
10:45 am By Jessie Lau
The Hang Seng Index traded at 19,301.30, up 1.12 per cent or 219.47 points. The Hang Seng China Enterprises index, which tracks Hong Kong-listed Chinese companies, traded at 8,170.02, down 0.80 per cent or 66.26 points.
On the mainland, the Shanghai Composite Index slipped 0.20 per cent or 5.71 points to 2,895.26, and the large-cap CSI300 index was slightly weaker by 0.01 per cent or 0.36 points at 3,118.37.
However, the Shenzhen Composite Index rose 0.15 per cent or 2.76 points at 1,798.89. The Nasdaq-style ChiNext Price Index also gained 1.43 per cent or 30.24 points at 2,143.15.
10:18 am By Laura He
Elsewhere in Asia, Australian shares pared sharp early losses in afternoon trade, after a sell-off in US equities on Friday and a further slump in crude prices sent the benchmark index down 1.8 per cent at open. The S&P/ASX 200 dropped 0.8 per cent to 4,854.00, with energy shares significantly weaker. Oi.l giant Santos dived 7.8 per cent, and Woodside Petroleum slid 2 per cent.
Other major indexes in the region also tracked US losses, as Japan’s benchmark Nikkei 225 fell 1.2 per cent to 16,831.80, and South Korea’s Kospi Composite Index edged down 0.2 per cent to 1,875.57.
10:04 am By Enoch Yiu
Hong Kong dollar continued its downward trend and briefly hit 7.8001 in early trade Monday morning, the lowest level since September 2011. It traded at 7.7998 at 9:30 am.
The currency has been falling since last week due to the capital outflow, as investors take money out of the city after the US began its interest-rate rise cycle in mid-December. The stock market has slumped in Hong Kong and China since the beginning of this year, causing investors to withdraw money from Hong Kong, resulting in a weaker Hong Kong dollar.
Hong Kong dollar is pegged to the US dollar at 7.80. Hong Kong Monetary Authority is set to intervene whenever the currency trades beyond a strong end of 7.75 or a weak end at 7.85.
9:49 pm By Enoch Yiu
The People’s Bank of China set the yuan’s midprice against the US dollar at 6.5590, stronger by 47 basis point. On Friday, it set the reference rate weaker by 21 basis point.
It also set the yuan’s midprice against the euro weaker by 305 basis point to 7.1702, and the yuan’s reference rate against every 100 yen at 5.6099, weaker by 438 basis points. The yuan’s midprice against the pound was stronger by 1,159 basis point to 9.3707.
Traders are allowed to trade up to 2 per cent each direction of the mid price for the day.
9:44 am By Jessie Lau
The Hang Seng Index opened lower Monday morning, trading at 19,287.38, down 1.20 per cent or 233.39 points from Friday’s close.
The H-shares Index that tracks mainland companies listed in Hong Kong also fell 0.98 per cent or 80.53 points to trade at 8,155.75.
Mainland stocks also opened lower, with the Shanghai Composite Index down 1.08 per cent or 31.27 at 2,869.70. The CSI300, which tracks the large caps listed in Shanghai and Shenzhen, fell 0.01 per cent or 0.17 points to 3,118.56.
The Shenzhen Composite Index dropped 0.04 per cent or 0.76 points to 1,795.37, while the Nasdaq-style ChiNext traded at 2,125.98, up 0.62 per cent or 13.08.
9:24 am By Laura He
Oil prices sank further to settle below US$30 a barrel last week. February WTI crude futures fell 5.7 per cent to US$29.42 a barrel on the New York Mercantile Exchange, recording a weekly loss of 11 per cent. March Brent plunged 6.3 per cent to end at US$28.94 a barrel on London’s ICE Futures exchange, losing more than 14 per cent for the week.
On Monday morning, crude prices dropped further in early Asian trade, with WTI futures down 1.6 per cent to US$28.94 a barrel. Brent futures also erased 2.1 per cent to US$28.33 a barrel.
9:07 am By Jessie Lau
Hong Kong stock market is poised to open lower on Monday, as the Hang Seng Index futures spot January contract dropped 1.85 per cent to 19,108 in the pre-trade session, and the H-share index futures were also down 0.84 per cent at 8,177.
All three major US indexes closed lower on Friday. The S&P 500 index ended down 2.16 per cent or 41.51 points to 1,800.33. The Dow Jones Industrial Average closed 2.39 per cent lower or 390.97 points to close at 15,988.08.. The Nasdaq Composite finished down 2.74 per cent or 126.59 points to 4,488.42.
In Asia, Tokyo’s Nikkei 225 fell 2.69 per cent to 16,686.10 Monday morning.
All Hong Kong stocks listed in the US as American Depository Receipts (ADR) closer lower than their Hong Kong counterparts after converted into local currency. HSBC’s ADR closed at a converted price of HK$53.899, down 4.92 per cent from Hong Kong close, Lenovo fell 6.89 per cent to HK$6.26, Sinopec slid 7.66 per cent to HK$3.94 while China Mobile dropped 3.21 per cent to HK$78.8.