Hang Seng slides 2.5pc on China slowdown fears | South China Morning Post
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HANG SENG

Hang Seng slides 2.5pc on China slowdown fears

PUBLISHED : Thursday, 23 May, 2013, 2:10pm
UPDATED : Friday, 24 May, 2013, 1:18am

Hong Kong shares suffered their worst daily loss in seven weeks on Thursday after a preliminary private survey suggested manufacturing activity in China contracted in May for the first time since October.

The Hang Seng Index closed down 2.5 per cent at 22,669.7 points, while the China Enterprises Index of the top Chinese listings in Hong Kong tumbled 2.8 per cent. For both, this was the biggest loss since April 5.

The Shanghai Composite Index shed 1.2 per cent in its biggest single-session drop since April 23. The CSI300 of the leading Shanghai and Shenzhen A-share listings closed down 1.3 per cent in its worst day since May 14.

Losses accelerated in the morning session after the flash HSBC Purchasing Managers’ Index (PMI) for May fell to 49.6, slipping under the 50-point level demarcating expansion from contraction for the first since October. The final HSBC PMI stood at 50.4 in April.

China Minsheng Bank slid 3.4 per cent after a downgrade by UBS analysts from “neutral” to “sell” and a nearly 20 percent cut in their target price for its H-share listing. The Chinese banking sector was also hurt by a news report that the country may remove the floor for interest rates by next year, a move that could potentially cut interest margins.

Huaneng Power rebounded 2.6 per cent from Wednesday’s two-month closing low. The Chinese power producer sector had slumped in the first three days of the week on fears of reduced margins from a potential tariff cut and a ban on lower quality coal imports. Morgan Stanley said on Thursday that a 2 per cent cut in on-grid coal power tariffs could potentially cut earnings by up to 19 per cent, but Huaneng’s plunge over the previous three days appears overdone.

 

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