Hong Kong stocks end flat after choppy session as regional political tensions weigh

Shanghai Composite up for a 3rd day after positive economic data on China’s services sector, giving some support to Hong Kong shares

PUBLISHED : Tuesday, 05 September, 2017, 9:03am
UPDATED : Tuesday, 05 September, 2017, 6:00pm

Hong Kong stocks closed little changed on Tuesday after a choppy session with investor sentiment still affected by the regional political tensions that had troubled the market the day before.

The Hang Seng Index fluctuated between 27,685.3 and 27,871.76 during the day before closing up 1.09 points at 27,741.35. The index had fallen for three consecutive sessions before Tuesday.

The Hang Seng China Enterprises Index, known as the H-share index, was up 0.1 per cent, or 8.92 points, to close at 11,191.59.

Daily turnover decreased 12 per cent to HK$77 billion (US$9.8 billion) from Monday.

Analysts said North Korea’s nuclear test on Sunday has sparked risk-off trading across the globe and concerns still weighed on the local markets, especially after some aggressive rhetoric from the US, whose ambassador to the United Nations said North Korean leader Kim Jong-un was “begging for war”.

“Gold prices continue to rise, indicating that the market sentiment hasn’t improved yet,” said Chan Wai-chung, an analyst with Bright Smart Securities.

Investors will wait and see how the US market performs when trading resumes on Tuesday following a public holiday on Monday, Chan said.

Among market movers in Hong Kong, Wharf Holdings jumped 3.6 per cent to HK$76.65, after the conglomerate filed an application to the exchange to spin off its property unit for a separate listing on the main board.

Henderson Land Development and China Resources Land rose 0.9 per cent and 0.6 per cent respectively to HK$48.8 and HK$24.3. Mainland property developer Sunac China soared 7.7 per cent to HK$25.3, and China Vanke climbed 3 per cent to HK$23.75.

China Shenhua Energy, however, slid further following recent losses, falling 1.9 per cent to close at HK$19.2.

However a stable performance in mainland Chinese markets lent some support to Hong Kong stocks, Chan added.

The market was buoyed by the Caixin China Services Purchasing Managers’ Index (PMI), a private gauge of sentiment in the mainland’s services sector released on Tuesday, which rose to a three-month high of 52.7 in August, up from 51.5 in July, indicating a stronger expansion.

The Shanghai Composite Index rose for a third day, up 0.1 per cent to end at a 20-month high of 3,384.32.

The large-cap CSI 300 added 0.3 per cent, or 4.74 points, to 3,384.32. The Shenzhen Composite Index and the start-up board index ChiNext gained 0.2 per cent and 0.1 per cent respectively to 1,972.14 and 1,885.16.

Combined turnover for the Shanghai and Shenzhen markets shrank more than 10 per cent to 562.6 billion yuan (US$85.8 billion) from Monday.

Insurance shares advanced, with Ping An Insurance gaining 2.1 per cent to 56.3 yuan, and China Life Insurance up 1.5 per cent to 29.28 yuan.