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Hong Kong stocks retreat after Hang Seng Index’s biggest advance in 2 weeks
A solid run among the mainland’s yuan-denominated stocks hit a snag as the CSI 300 Index and Shanghai Composite retreated
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Zhang Shidongin Shanghai
Hong Kong stocks dropped on Tuesday, retreating from the benchmark gauge’s biggest gain in more than two weeks a day earlier as blistering gains in the mainland’s markets took a pause.
The Hang Seng Index fell 0.5 per cent to 25,496.55 at the close, surrendering part of the 2.2 per cent gain from the previous trading day. The Hang Seng Tech Index slid 1.2 per cent.
A solid run among the mainland’s yuan-denominated stocks hit a snag as the CSI 300 Index slipped 0.7 per cent and the Shanghai Composite Index retreated 0.5 per cent. Leveraged stock traders had boosted their bets to an all-time high of 2.28 trillion yuan (US$319.2 billion) on Monday, adding fuel to a liquidity-driven rally that centred on technology companies.
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Chipmaker Semiconductor Manufacturing International slumped 4.6 per cent to HK$60.70 and China Unicom slid 4.4 per cent to HK$9.37. Machine-tool maker Techtronic Industries lost 3.4 per cent to HK$96.35. Alibaba Group Holding shed 1.8 per cent to HK$134.70, giving up some of a 19 per cent gain on Monday spurred by an improved business outlook. Tencent Holdings slipped 0.7 per cent to HK$600.50.
Any oscillation in mainland stocks can have a big sway over Hong Kong equities, as Chinese onshore investors contribute more than a fifth of daily transactions through the exchange-link programme.
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Hong Kong stocks may catch up with the gains in mainland shares due to lower valuations and more sensitivity to expectations about interest-rate reductions by the Federal Reserve.
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