Hong Kong stocks close the week lower as US tech stocks slump
Hang Seng closes Friday 0.2 per cent higher at 25,626.49, but 1.6 per cent down on the week
Hong Kong markets recovered some ground on Friday but still finished the week lower as US stocks were dragged down by a worsening slump in the technology sector. Mainland markets dropped.
The Hang Seng Index rose by 0.2 per cent, or 61.15 points, to 25,626.49 by the close, although it remains 1.6 per cent, or 403.80 points, lower on the week.
The Hang Seng China Enterprises index was 0.4 per cent, or 38.74 points, higher at 10,384.89 on Friday.
In the past week, the Hong Kong benchmark index reached a high of 25,957.78, but failed to break through the 26,000 level reached in the previous week – a two-year record high.
Louis Tse Ming-kwong, a director of VC Brokerage in Hong Kong, said it would be difficult for the index to reach that level again this month.
“The market is not going to move largely until after June, because many companies and funds are doing mid-year reviews so they do not favour big movements,” Tse said.
“After the Fed meeting on Wednesday overnight, the Hong Kong market is quiet because the meeting has not reported any tensions or surprising moves.”
Blue Chips were mixed on Friday. Tencent, the most heavily traded stock, fell modestly by 0.1 per cent to close at HK$272.6. Ping An Insurance closed flat at HK$50.15, while AIA gained 0.6 per cent to HK$55.80. Hutchison Telecom surged 3.5 per cent to HK$2.68 and China Unicom was up 0.9 per cent at HK$11.3.
Hong Kong property stocks remained under pressure. Sino Land was down 0.2 per cent to HK$13.24, Sun Hung Kai slid 0.6 per cent to HK$5.02, and Hang Lung group saw a 2.9 per cent drop to HK$31.6. Cheung Kong Property, however, managed a 0.4 per cent rise to HK$61.1 after buyback calls.
Daily market turnover was HK$80.69 billion, up from Thursday’s HK$74.99 billion.
Trading of Hong Kong-based Grand Peace Group, which is involved in funeral-related business, was suspended after its shares plunged 86 per cent to HK$0.221 today.
The Shanghai Composite Index fell 0.3 per cent, or 9.32 points, to 3,123.17 while the CSI 300 — which tracks the large caps listed in Shanghai and Shenzhen — dropped 0.3 per cent, or 10.03 points, to 3,518.76. The Shenzhen Composite Index lost 0.2 per cent, or 3.66 points, to 1,866.05 while the Nasdaq style ChiNext shed 0.3 per cent, or 6.21 points, to 1810.05.
The odds that MSCI will announce on June 21 its intention to include Chinese A shares in its global equity indices – a watershed moment for the mainland’s capital markets – have increased after the index provider said this year it will cut the number of stocks eligible to 169 from the original proposal of 448.
However fund managers are skeptical as to whether a favourable decision would actually lead to any material change in underlying market trends, given the small increase in Chinese weighting in the indices.
“The market should remain more or less the same before the MSCI announces whether A shares will be included,” Tse said.
Asian markets generally rose on Friday, with Tokyo’s Nikkei 225 gaining 0.6 per cent to 19.943.26, the Sydney All Ordinaries advancing 0.2 per cent, and the South Korea Kospi more or less flat, edging up 0.01.
This week’s decline in Hong Kong markets comes as US stocks were dragged lower by the technology sector, whose losses were led by Apple and Google’s owner, Alphabet, on Thursday. It was the continuation of a slide that began last Friday.
The Dow Jones Industrial Average finished 0.1 per cent lower at 21,359.90, the S&P 500 was down 0.2 per cent at 2,432.46 and the Nasdaq Composite slid 0.5 per cent to 6.165.50.