Hong Kong stocks slip ahead of big earnings week, property sector rebounds on state support hopes
- Sentiment turns cautious ahead of earnings announcements next week when about 30 companies, which are members of the Hang Seng Index, are due to unveil results
- Chinese property developers Longfor Group and China Resources Land saw a rebound in their shares amid expectations authorities will do more to support the sector
The Hang Seng Index edged down 0.7 per cent to 16,961.66 at the close. The Hang Seng Tech Index underperformed, dropping 1.4 per cent and the Shanghai Composite Index slipped 0.2 per cent.
The resilience of the rebound in Hong Kong stocks will be put to test next week, when about 30 companies that are part of the benchmark will deliver earnings reports. The Hang Seng gauge has risen 13 per cent from a January low after China’s consumer prices unexpectedly perked up last month.
“The focus is now on whether earnings growth will pick up,” said Deng Lijun, an analyst at Huajin Securities. “Before the market figures out a clear trend on that, stocks are likely to trade sideways.”
“This move is of major significance for several reasons, it is a highly visible sign of US-China tensions in an election year, where we are likely to see more measures as policymakers try to look tough on China to garner support,” said Robert Carnell, the regional head of research, Asia-Pacific at ING while adding that if this ban is successfully enforced, there is concern that this may set a precedent for this sort of ultimatum being given to other businesses.