Hong Kong, mainland stocks close lower on liquidity concerns

PUBLISHED : Thursday, 30 March, 2017, 10:40am
UPDATED : Thursday, 30 March, 2017, 10:30pm

Hong Kong stocks erased early gains to close lower on Thursday, with mainland China shares also losing ground on growing liquidity concerns.

The Hang Seng Index slipped amid fluctuating trade, down 0.4 per cent or 90.96 points to 24,301. The Hang Seng China Enterprises Index, known as the H-shares index, shed 0.8 per cent to 10,355.

China’s central bank skipped open market operations for a fifth day .

Among market movers, China’s Mengniu Dairy saw volatile trading but closed 4.8 per cent higher to HK$15.94 despite the company’s 751 million yuan (US$109 million) net profit loss for 2016 announced on Wednesday.

Having been hurt by bearish sentiment on the mainland due to investors’ liquidity concerns, Hong Kong’s market also saw shares lose ground across the board, said Castor Pang Wai-san, head of research at Core Pacific Yamaichi.

“Investors now are largely looking at the US market, while tumbling China indices have dragged down Hong Kong shares,” Pang said. “The market should move within a narrow range for the next week.”

China Construction Bank closed 1.2 per cent lower to HK$6.33, despite the second largest lender in China reporting a better-than-expected increase in net profit to 231.5 billion yuan.

ICBC, the world’s largest bank by assets, was down 0.9 per cent to close at HK$5.1. The lender reported a 0.4 per cent rise in profit to 278.2 billion yuan after the Hong Kong market closed on Thursday.

Another heavyweight Chinese lender Bank of Communications slipped 0.5 per cent to close at HK$6.06.

Macau’s casinos recovered from earlier losses and closed higher, extending a recent rally driven by expectations of an increase in the city’s gaming revenues. Citic expects March revenue to increase 6 per cent year on year to US$2.45 billion.

In February, gross revenues for Macau casinos climbed 17.8 per cent, the highest growth in the last seven months.

Sands China was up 0.69 per cent to close at HK$36.4, while Galaxy Entertainment Group gained 0.8 per cent to close at HK$43.1.

Chinese online major Tencent Holdings retreated, closing down 1.23 per cent to HK$225.2. The stock touched an all-time high of HK$230.2 on Wednesday after Tencent acquired a 5 per cent stake in US electric car maker Tesla.

US markets closed mixed overnight in the wake of hawkish comments from Federal Reserve speakers.

On the Chinese mainland, shares lost ground after being dragged down by sharp declines in newly listed shares.

The Shanghai Composite Index edged down 1 per cent to 3,210.0 at the close. The large-cap CSI300 closed 0.82 per cent lower at 3,436.

The Shenzhen Composite Index slumped 2 per cent to close at 1,979 and the ChiNext start-up board index shed 1.8 per cent to close at 1,893.

Hengdian Group Tospo Lighting soared by its 44 per cent allowable limit on its debut in Shanghai, rising to 26.83 yuan from an IPO price of 18.63 yuan.

Additional reporting by Celia Chen