Hang Seng falls 1.6pc, China shares outperform
Hong Kong shares fell for the first time in three days on Wednesday, in line with a broader sell-off in high yielding counters including property, as strong US data fanned speculation that the Federal Reserve may taper its bond buying programme.
Hong Kong shares fell for the first time in three days on Wednesday, in line with a broader sell-off in high yielding counters including property, as strong US data fanned speculation that the Federal Reserve may taper its bond buying programme.
The Hang Seng Index and China Enterprises Index of the top Chinese listings in Hong Kong each fell 1.6 per cent. The Hang Seng benchmark dipped back into negative for the year, now down 0.5 per cent in 2013, compared to the 6 per cent slide on the H-share index.
In the mainland, the CSI300 of the leading Shanghai and Shenzhen A-share listings ended down 0.1 per cent, while the Shanghai Composite Index closed up 0.1 per cent at 2,642.6 points.
Shanghai volumes stayed robust, while turnover in Hong Kong climbed to its highest since last Thursday. Real estate investment trusts (REITs), which were beneficiaries of inflows from waves of central bank easing, accounted for a sizeable portion.
US Treasury yields surged to their highest levels in over a year on Tuesday after sturdy home price data and a strong consumer confidence report pointed to a more entrenched recovery in the world’s largest economy.
Hong Kong will suffer if there’s a risk reversal … as the US economy improves
“Hong Kong will suffer if there’s a risk reversal, when funds flow out as the US economy improves,” said Hong Hao, chief strategist at Bank of Communication International.
“As Japan has shown, volatility is emerging in the most unexpected places these days, so investors should be prepared for more volatility in the next two weeks,” Hong added.
Link REIT slid 4.2 per cent in its worst day since May 2012 in four times its 30-day average volume, trimming 2013 gains to 7 per cent after posting double-digit percentage gains the previous four years.
Wharf Holdings dived 5.7 per cent in its worst day since October 2011, while the Hang Seng Property Index was a standout underperformer, falling 3 per cent.
Losses on Wednesday brought Wharf to its lowest in nearly a month, cutting 2013 gains to 15.3 per cent. It is now down 3.8 per cent this week, hurt earlier by anemic weekend home sales in the Chinese territory following multiple rounds of cooling measures, the last which came in late February.
In a note on Monday, BNP Paribas analysts said only four units were sold in the primary market over the May 25 ot 26 weekend, while 44 percent less units were sold in the secondary market from the previous weekend.
Zoomlion Heavy Industry was also a key underperformer in both markets, sliding despite an official rejection of recent media reports that China’s second-largest construction equipment maker provided false sales data.
Trading for the first time this week, Zoomlion tumbled 5.4 per cent in Hong Kong to its lowest closing level since September 2011. Its Shenzhen listing slid 2.5 per cent.
Strength in the auto sector helped onshore Chinese markets outperform Hong Kong. The Hang Seng A-H premium index closed at its highest in almost a month, suggesting A shares were trading at the biggest premium over H shares since April 19.
That premium could yet widen. The Securities Times reported on Wednesday that the number of new A-share trading accounts last week hit a two-month high, a sign that retail investors are returning.
The reported insiders as saying that initial public offerings in the mainland, suspended since late last year, could resume in the middle of August.
