Update | Hong Kong stocks dragged down by HSBC’s worst slump since Brexit
HSBC plunges 5 per cent to HK$65.6 after weak earnings, its biggest fall since June 24 when the Brexit vote was announced
Hong Kong stocks retreated from earlier gains to close lower on Tuesday, as heavily weighted HSBC shares recorded their biggest fall in eight months following disappointing earnings and a share buyback scheme that was smaller than expected, which offset a rally in Hong Kong property and mainland insurance sectors.
The Hang Seng Index ended 0.8 per cent or 182.6 points lower at 23,963.6 on Tuesday while the Hang Seng China Enterprises Index lost 0.4 per cent to 10,408.6.
Daily turnover in Hong Kong was HK$87.7 billion, up from HK$78.1 billion a day earlier.
HSBC, the most traded stock on Tuesday, saw its shares slump 5 per cent to HK$65.6 – the biggest drop since June 24 last year when the Brexit vote was announced, after it posted a worse-than-expected pre-tax profit drop of 62.3 per cent and announced a US$1 billion share buyback scheme, which also disappointed investors who were expecting more.
Hong Kong’s stock market will be driven by company results in coming weeks, while investors may decide to take profits after the benchmark soared more than 10 per cent since the Christmas holidays, analysts said.
“Today’s drop was obviously dragged down by HSBC. From The Bank of East Asia to HSBC and Hang Seng Bank, recent company results to some extent hurt the short-term sentiment and people are now worried about the results of Standard Chartered,” said Kenny Wen Kit, wealth management strategist at Sun Hung Kai Financial.
AIA is likely to post robust results, but some investors may see it as a chance to take profit
