Update | Hong Kong stocks see small rise as strong company earnings offset trade war concerns
Hang Seng recovers from early loss sparked by a media report of stiff tariffs on Chinese goods, with strong earnings from smartphone camera firm Sunny Optical lifting the mood
Hong Kong stocks eked out a small gain on Tuesday, as optimism over company earnings after Sunny Optical Technology Group posted strong results offset concerns that planned US tariffs on Chinese goods could spark a trade war.
The Hang Seng Index added 0.1 per cent, or 36.17 points, to close at 31,549.93. It had fallen as much as 1.1 per cent early in the session after a report by The Washington Post that US President Donald Trump was expected to impose US$60 billion of tariffs on Chinese goods this week, roughly double what senior aides had originally proposed.
“Even if some Hong Kong stocks rise on positive earnings results, there will be profit-taking pressure over global trade tensions,” said Linus Yip, chief strategist for First Shanghai Securities.
The Hang Seng China Enterprises Index, or the H-share gauge, dropped 0.5 per cent.
Helping the Hang Seng recover was Sunny Optical, whose shares surged 8.6 per cent to a record HK$159.80 after the supplier of camera parts to smartphone makers including Apple, Huawei and ZTE reported net income of 2.9 billion yuan (US$458.2 million) last year, beating an estimate of 2.7 billion yuan from analysts polled by Bloomberg.
Also gaining on earnings hopes were Tencent Holdings, the biggest weighting on the Hang Seng Index, which added 1 per cent to HK$466.60 before its earnings release on Wednesday. The internet giant was set to report a 43 per cent profit increase last year, according to data compiled by Bloomberg.
Geely Automobile Holdings added 2.2 per cent to HK$27.50, 6 per cent shy of its all-time high set in November. The carmaker is also due to release its annual results on Wednesday. Profit may have surged 95 per cent in 2017, Bloomberg data showed.