Hong Kong stocks log worst week in three months as US rate rise fears persist

The Hang Seng Index snapped a three-day losing streak but still recorded its biggest weekly decline since mid-June

PUBLISHED : Thursday, 15 September, 2016, 9:29am
UPDATED : Thursday, 15 September, 2016, 10:09pm

Hong Kong stocks halted a three-day losing streak to close higher on Thursday, led by a jump in Macau gaming stocks, but still notched their worst week in three months as investors fear a Fed rate rise may come sooner than expected.

The Hang Seng Index ended up 0.6 per cent, or 144.95 points, at 23,335.59, paring its weekly losses to 3.2 per cent. However, that still marks the worst weekly performance since mid-June.

The Hang Seng China Enterprises Index, or the H-shares index, added 0.6 per cent or 53.21 points to close at 9,595.73. For the week, the index tumbled 4.6 per cent, the steepest weekly percentage decline since early May.

Trading volumes remained light, with turnover in the Hong Kong market at HK$66 billion, slightly higher than Wednesday’s HK$61 billion, but sharply lower compared with Monday’s HK$94 billion and Tuesday’s HK$73 billion.

“Market trading was quiet because investors largely took to the sidelines ahead of next week’s US policy rate meeting,” said Louis Tse Ming-kwong, a director of VC Brokerage in Hong Kong.

The Federal Reserve is set to hold a two-day policy meeting next Tuesday to discuss whether to raise interest rates. Several Fed officials have recently offered divergent opinions on the issue of interest rates, casting uncertainty over the US central bank’s monetary policy.

Tse said it was possible the US Fed would “give us a surprise” by raising the interest rate next week, as a move to tighten policy later in the year might conflict with November’s US presidential election.

Turnover in Hong Kong was also dented by a lack “money from the north”, as Chinese traders paused for the mid-Autumn festival holiday, Tse said.

Hong Kong stock market will be closed for the mid-Autumn Festival holiday on Friday and resume trading on Monday. Chinese stock markets are closed today and tomorrow and will also reopen on Monday.

Macau casino stocks led the way on the Hong Kong exchange, as investors expect the long holiday weekend on the mainland to bring more visitors to the former Portuguese colony and boost its gaming industry.

Galaxy Entertainment and Sands China were the two best performers among blue-chips. Galaxy surged 5.4 per cent to HK$30.15, while Sands China jumped 5.3 per cent to HK$35.95, also drawing support from the opening of its new resort - The Parisian - on Tuesday.

Apple-related stocks advanced in Hong Kong, after the US tech giant said Wednesday that initial supplies of the iPhone 7 Plus have sold out globally due to strong demand. AAC Technologies, which supplies acoustic components to Apple, climbed 3 per cent to HK$83. Optical component manufacturer Sunny Optical Technology gained 2.2 per cent to HK$39.15, and Korean camera module maker Cowell E Holdings, also a supplier for Apple, soared 6.9 per cent to HK$3.1.

Cheung Kong Property rose 1.4 per cent to HK$56.3, after the Hong Kong-based real estate developer won its first government land site in four years in Hong Kong’s Sha Tin area.

Elsewhere in Asia, Tokyo’s Nikkei Average closed down 1.3 per cent, while Seoul’s Kospi finished 0.4 per cent higher, and Sydney’s S&P/ASX 200 tacked on 0.2 per cent.