Hong Kong stocks at three-week low on earnings woe; Belle slumps
Hong Kong stocks fell to their lowest level in nearly three weeks after more interim results fell short of market expectations and after a Greek bid for more time to enact reforms and make spending cuts revived euro zone jitters.
Chinese footwear and sportswear group Belle International Holdings (1880.HK) lost 4.58 percent to HK$14.2, after HSBC downgraded the stock on Wednesday, citing increasing pressure on its profit margin amid slowing Chinese economic growth and rising labour costs.
Meanwhile, investors rushed to clear positions of heavyweight PetroChina (0857.HK) ahead of its interim results, which are due on Thursday, on fears that the state-owned firm’s profit could be hit by the weak global economy. The stock lost 2.33 per cent to HK$9.63 on Wednesday.
“The benchmark index has increased by around 8 per cent since hitting a low in July, and any bad news right now will prompt investors to rush to lock in profit,” Hayman Chiu, an equity strategist with Cinda International Holdings, told SCMP.com.
The benchmark Hang Seng Index lost 1.06 per cent to 19,887.78, its lowest level since August 6. The Hang Seng China Enterprises Index, which tracks the performance of Hong Kong-listed China enterprises, fell by 1.29 per cent to close at 9,698.83.
“If the earnings from energy heavyweights and banks fall short of expectations, there could be further falls,” he said, referring to Petrochina's interim result, and to several financial institutions due to post earnings on Thursday. Chiu expected the market to trade in a narrow range between 19,700 and 20,300 for the near future.
Bank of China (3988.HK), Ping An Insurance (2318.HK), China Minsheng Banking (1988.HK) are among a batch of companies to release earnings on Thursday. China Petroleum & Chemical Corporation, which is better known as Sinopec, (0386.HK) is due to release results on Friday.
Market sentiment was also hit by remarks from Greek Prime Minister Antonis Samaras that the nation will “demand no additional money” for the moment and that he will lobby to delay a bailout package from the European Central Bank so that Greece can take more time to implement reforms and spending cuts.
China Telecom (0728.HK), the smallest of the country’s three carriers, lost 4.5 per cent to HK$4.170 after saying first-half profit fell by 8.3 percent to 8.81 billion yuan.
CNOOC (0883.HK), the oil giant which reported a 19 percent profit decline on Tuesday, extended its losses on Wednesday after financial houses, including HSBC and Daiwa cut their price targets for the stock, which closed down 1.72 per cent to HK$14.84.
China's largest listed home appliance producer Haier Electronics, (1169.HK), jumped 4.1 per cent to HK$9.15 after first half profit surged 21 per cent.
Mainland developer Yuexiu Property (0123.HK) lost 2.13 per cent to HK$1.84 after saying first-half net profit shrank by 65 per cent.