Hong Kong stocks complete longest monthly winning streak in a decade
Hang Seng Index drops on Thursday, trimming August’s gains, as major Chinese banks retreat
Hong Kong’s stocks retreated on Thursday, trimming a monthly gain, as declines in banking stocks outweighed the strength of a gauge indicating China’s manufacturing expanded for a 13th straight month.
The Hang Seng Index dropped 0.4 per cent, or 124.31 points, to 27,970.30 at the close. The benchmark had finished Wednesday above 28,000 for the first time since 2015. The Hang Seng China Enterprises Index, or the H-share gauge, fell 0.7 per cent.
Traders sold shares in China’s biggest state-owned banks including Industrial and Commercial Bank of China and China Construction Bank, which have advanced at least 15 per cent this year, after they released first-half results last night. Even after Thursday’s decline, the city’s benchmark still rose 2.4 per cent in August, posting gains every month since the start of the year.
People are taking profit in Chinese banks and parking it back into property stocks
The streak of eight monthly advances is the longest since October 2007. The Hang Seng Index is up 27 per cent this year, as lower valuations lure mainland investors who access the city’s equities via exchange link schemes.
“People are taking profit in Chinese banks and parking it back into property stocks,” said Alex Wong Kwok-ying, director at Ample Finance Group. “There is no damage to overall sentiment and the market should resume rising in the next day or so.”
China’s official purchase managers’ index for the manufacturing industry rose to 51.7 in August, the statics bureau said on Wednesday. That was higher than the estimate of 51.3 in a Bloomberg survey and the reading of 51.4 a month earlier. A reading above 50 indicates expansion, and below means contraction.
