Hong Kong stocks end week down 0.3pc, mainland China shares extend rally for third week

Hang Seng Index snaps its rising trend of the past two weeks to close on Friday below the 24,000 threshold

PUBLISHED : Friday, 24 February, 2017, 10:17am
UPDATED : Friday, 24 February, 2017, 9:44pm

Hong Kong stocks extended their declines on Friday to close the week below the 24,000 threshold, dragged down by profit-taking, which offset a rally in telecommunication and aviation stocks.

For the week, the index lost 0.3 per cent, ending a rally over the past two weeks.

The Hang Seng Index closed 0.6 per cent lower at 23,965.7, while the Hang Seng China Enterprises Index ended 1 per cent lower to 10,418.7. Total turnover on the main board slipped 1.7 per cent to HK$80.4 billion.

“The market is now consolidating after the sharp rise since December 23. The hot money has shifted from one sector to another quickly but total turnover remains high...I expect that trend to continue for a while,” Hanna Li Wai-han, strategist at UOB Kay Hian Hong Kong said.

Stocks that have gained in recent weeks, such as The Wharf (Holdings) Limited and China Resources Land, led losses on the Hang Seng Index.

China Unicom was the best performing blue chip, with its shares up 2.9 per cent to HK$9.6, their best level since December 9 after a state-controlled newspaper, citing officials, reported that the telecom sector is the key target for mixed ownership reform.

Aviation stocks also gained strength. Beijing Capital International Airport jumped 4.9 per cent to HK$8.4 while China Eastern Airlines rose 4 per cent to HK$4.5.

The market is now consolidating after the sharp rise since December 23
Hanna Li Wai-han, UOB Kay Hian Hong Kong

Amid expectations of more stimulus on economic reform during the upcoming “Two Sessions” meetings by top government officials starting from March 3, new economy sectors like health care, new energy, and technology may become the focus of investors, Li said.

Among major draggers, Apple parts suppliers followed the retreat of the US tech giant on Wall Street overnight. AAC Technologies, the acoustic component manufacturer which works with Apple, was the biggest loser on the Hang Seng Index, sinking 4.7 per cent to HK$82.8.

Sunny Optical Technology, which supplies dual cameras for Apple’s iPhone 7 Plus, fell 5.6 per cent to HK$50.

AIA Group shares edged down 0.6 per cent to HK$48.8, despite better-than-expected annual results and dividend payment. The insurer announced 25 per cent growth in the value of new business for 2016, based on actual exchange rates, and declared a 25 per cent increase in final dividend.

Standard Chartered, which is due to announce its annual results later on Friday, inched up 0.2 per cent to HK$73.2.

On the mainland, the Shanghai Composite Index closed up 0.1 per cent to 3,253.4, recovering from losses in the morning after a rally in logistics and airline stocks. The large-cap CSI 300 Index rose 0.02 per cent to 3,473.9, the Shenzhen Component Index gained 0.1 per cent to 10,443.7, and the Nasdaq-like ChiNext increased 0.7 per cent to 1,938.4.

Shares in SF Express, mainland China’s largest express delivery company, soared by their daily limit of 10 per cent to 55.2 yuan in Shenzhen in their debut trading after a back door listing through a reverse takeover of a listed rare earth trader.

For the week, the Shanghai Composite Index gained 1.6 per cent, extending its rising trend for the third consecutive week.