Daily Report

Shanghai stocks end lower following new curbs property market, Hong Kong trades flat after holiday break

Property developer shares give up ground after Shanghai and Shenzhen impose new curbs to cool housing market

PUBLISHED : Tuesday, 29 March, 2016, 9:17am
UPDATED : Tuesday, 29 March, 2016, 7:51pm

Hong Kong stocks ended little changed while mainland China stocks fell for a second day on Tuesday, as investors weighed new home-price cooling measures in two mainland cities, and an upcoming speech by Federal Reserve Chair Janet Yellen, due to be delivered later in the US business day.

The Shanghai Composite Index ended down 1.28 per cent, shedding 37.99 points, to close at 2919.83. The blue-chip CSI300 dropped 1.08 per cent, or 34.32 points to finish 3,135.41. The Shenzhen Composite Index declined 1.82 per cent, or 34.15 points to 1,840.51, the Nasdaq-style ChiNext Index lost 2.14 per cent, or 47.14 points to end at 2,152.55.

Total turnover for Shanghai and Shenzhen was 537 billion yuan (HK$640 billion), compared with 626.1 billion yuan on Monday.

In the first day of trade since Thursday, the last day of trade before the Easter break, the Hang Seng Index inched up 0.10 per cent, adding 20.69 points to 20,366.30. Turnover was HK$60.07 billion.

The Hang Seng China Enterprises index inched up 0.30 per cent, or 25.80 points to 8,702.65.

In Shanghai and Shenzhen, media, public transportation and hotels were the biggest losers. “The A-share market is still seeking a bottom, as the valuation is 20 to 30 per cent higher than its historic low,’’ Shenwan Hongyuan senior strategist Jerry Xie said.

In Hong Kong, casino operators and insurers pushed up the benchmarks, but mainland property developers fell on tightened policy on first-tier cities.

“The local market shows no clear direction, as mainland stock markets remain weak,’’ said KGI Asia executive director Ben Kwong Man-bun. Investors are now in a wait-and-see mode as to whether Yellen gives clues on the interest rate hike in her speech later on Tuesday.

Kwong also said futures contracts due for settlement in Hong Kong on Thursday were also a factor in tamping down buying activity.

“Risk aversion has reduced, but there is no specific momentum,’’ said Kwong. He estimates the Hang Seng Index may hover around 20,000 and 20,800 in the short term.

Among movers in Hong Kong, Sands China’s shares jumped 3.65 per cent to HK$31.2, AIA Group rose 1.43 per cent and Ping An Insurance inched up 0.55 per cent.

China Shenhua Energy shares tumbled 2.25 per cent to HK$12.16, after the coal supplier said net profit last year dropped 55 per cent year on year.

Property developers shares were mostly lower after the Shanghai and Shenzhen governments launched new price-cooling measures Friday. China Resources Land shares fell 2.6 per cent to HK$19.48, and China Overseas Land & Investment lost 1.44 per cent to HK$23.95.

“We expect Beijing and some top-tier cities to follow the same pattern with more tightening on the mortgage side,” said Venant Chiang and Jianping Chen, equity analysts from Jefferies, in a research note on Tuesday.