Hong Kong stocks decline on capital outflow concerns
Hong Kong Stocks closed lower on Thursday, falling for the first time in three days on concerns about capital flight from the city after the US dollar index rose to a one-month high.
The Hang Seng Index dropped 0.8 per cent, or 220.83 points, to end at 27,421.6. The Hang Seng China Enterprises Index, or the H-share gauge, fell 1.5 per cent to 10,874.52.
The US dollar spot index rose to the highest level since August 17 on optimism that President Donald Trump’s tax-cut plan will become law this year. The probability that the Fed will raise the benchmark interest rate in December rose to 70 per cent from 39 per cent two months ago, according to data compiled by Bloomberg.
“The liquidity for the Hong Kong stock market may worsen under the double pressure of a stronger US dollar and the increasing odds of rate increases in the US,’’ said Ken Chen, a strategist at KGI Securities in Shanghai.
Financial stocks provided the biggest drag on the benchmark.
Ping An Insurance Group declined 2.6 per cent to HK$59.4, and China Life Insurance fell 1.7 per cent to HK$23.25.
AIA Group, the world’s second-largest life insurer by market value, lost 0.6 per cent to HK$58 after Macquarie cut its recommendation on the stock to underperform from neutral and lowered the price target to HK$53.
Zhongan Online P&C Insurance, which is backed by Ant Financial and Tencent Holdings, surged 9.2 per cent from its IPO price to close at HK$65.2 on trading debut. It jumped as much as 18 per cent to HK$70.5 earlier in the day.
On the mainland, the Shanghai Composite Index retreated 0.2 per cent to 3,339.64. The CSI 300 Index and the Nasdaq-style ChiNext Index were both flat, closing at 3,822.54 and 1,854.73 respectively.
The Shenzhen Composite Index dropped 0.2 per cent to 1,974.78.
Trading was light ahead of a week-long holiday that starts on October 1. The mainland’s financial markets will be shut for all of next week and reopen on October 9.
Jiangsu Yanghe Brewery gained 3.1 per cent to 103.41 yuan. Kweichow Moutai, the nation’s biggest liquor maker, added 2 per cent to 518.38 yuan. Inner Mongolia Yili Industrial Group, China’s largest dairy maker, rose 3.9 per cent to 26.42 yuan.