Hong Kong and mainland markets end lower amid thin turnover, stall in Wall Street rally

Hang Seng Index closes 0.3 per cent lower at 21,574.76 ahead of extended holiday break with trading to resume Wednesday

PUBLISHED : Friday, 23 December, 2016, 9:30am
UPDATED : Friday, 23 December, 2016, 10:10pm

Hong Kong and mainland Chinese stocks fell on Friday, tracking US stock indexes lower amid thin turnover on the final trading day before Christmas.

The Hang Seng Index ended down 0.28 per cent or 61.44 points at 21,574.76. The Hang Seng China Enterprises Index dropped 0.2 per cent or 18.49 points to 9,181.75.

Turnover stood at HK$50.4 billion, slightly up from HK$50.2 billion on Wednesday but still below the daily average of HK$67.2 billion for the first 11 months.

Materials, energy and financial shares led the declines. Chinese insurance giant Ping An Insurance dropped 0.52 per cent to HK$38.4. Sinopec fell 1.8 per cent to HK$5.48.

Li & Fung, the world’s top supplier of clothes and toys to retailers, declined 3.86 per cent to HK$3.49.

China Unicom rose 0.79 per cent to HK$8.98, adding to recent gains amid expectations that the company was slated for a pilot run on mixed-ownership reform.

China’s Minsheng Financial Holding was one of the most heavily traded shares in the morning, after various media reports said the company is bidding for Portugal’s Novo Banco. It rose as much as 2 per cent in early trade, but ended the day unchanged at 77 Hong Kong cents.

China Construction Bank was the most active shares, advancing 3.12 per cent to close at HK$5.62.

“Hong Kong stocks are partially eclipsed by the strong performance in US shares,” said analysts at China Galaxy International in a note on Friday. “Emerging markets including Hong Kong are temporarily less attractive to speculators, especially ahead of the holiday season.”

“We expect Hong Kong stocks to be directionless until the long holiday is over,” they said.

Markets in Hong Kong will reopen on Wednesday, while Shanghai and Shenzhen will open on Monday as usual.

In other action on Friday, Shanghai’s Composite Index dropped 0.94 per cent to 3,110.15. The CSI 300, which tracks large companies listed in Shanghai and Shenzhen, closed 0.84 per cent lower to 3,307.60.

In Shenzhen, the Component Index dropped 1.04 per cent to 10,199.86 while the Shenzhen Composite Index lost 1.12 per cent to 1,971.07. The Nasdaq-style ChiNext fell 1.09 per cent to 1,964.54.

China’s government bonds eased slightly on Friday, after recovering from sell-off earlier in the week. The benchmark 10-year treasury yield fell 2.58 basis points to 3.19 per cent at 3.40pm.

In other Asian stock markets, Sydney’s S&P/ASX 200 fell 0.28 per cent to 5,627.90. Markets in Japan were closed for a public holiday.

On Wall Street on Thursday the Dow eased for a second straight session, dropping 0.12 per cent or 23.08 points to 19,918.88. The S&P 500 also finished lower, easing 0.19 per cent to 2,260.96. The Nasdaq Composite lost 24.01 points, or 0.4 per cent, to 5,447.42.