Daily Report

Mainland stocks slump to three-month low while Hong Kong joins Asian rally

Mainland stocks slump to 3-month low while Hong Kong rallies

PUBLISHED : Monday, 24 April, 2017, 10:11am
UPDATED : Monday, 24 April, 2017, 6:21pm

Chinese mainland stocks slumped to a three-month low at Monday’s close, as investors worried that the government would further tighten measures to prevent leveraged trading.

The Shanghai Composite Index suffered its biggest daily decline of the year so far, falling 1.4 per cent to 3,129.5, the lowest level since January 20. The CSI 300 — which tracks large companies listed in Shanghai and Shenzhen — dropped 1.0 per cent to 3,431.3.

The Shenzhen Component index declined 2.1 per cent, the largest drop since January 16,

to close at a three-month low of 10,091.9, while the Shenzhen Composite Index lost 2.4 per cent or 47 points to 1,873.4. The Nasdaq-style ChiNext shed 1.6 per cent, or 29 points, to 1,809.9.

The China Insurance Regulatory Commission urged companies to stay away from aggressive investment strategies in its latest guidelines published on Friday, while the banking regulator said it would strengthen its crackdown on irregularities in the finance sector.

Most mainland sectors closed lower on Monday, with infrastructure builders and material producers leading the losses. China CAMC Engineering slumped 10 per cent to 26.8 yuan while China Gezhouba Group dropped 9.1 per cent to close at 12.0 yuan.

However, Hong Kong markets joined a rally in the rest of Asia to close higher on Monday as the first round of the French presidential election on Sunday pointed to a more stable political situation in Europe.

The Hang Seng Index jumped 0.4 per cent or 97 points to close at 24,139.5, while the Hang Seng China Enterprises index added 0.6 per cent or 57.6 points to close at 10,107.6

Hong Kong’s banking sector outperformed on Monday, with Standard Chartered leading the sector, up 3.5 per cent to close at HK$70.7. Hang Seng bank advanced 1.8 per cent to close at HK$156.5 and HSBC added 1.1 per cent to close at HK$63.

Macau casino operators were among the biggest losers on Monday, with Galaxy Entertainment Group and Sands China down 1.8 per cent and 1.5 per cent to close at HK$41.5 and HK$35.5 respectively.

Hong Kong property developers also decline. New World Development and Cheung Kong Property Holdings slid 0.8 per cent and 0.6 per cent respectively to close at HK$9.6 and HK$54.5.

HNA Holding Group dropped 15 per cent to a two-year low of HK$0.2 after reports on Chinese social media about the company’s close relationship with a Chinese party official.

Hong Kong markets traded higher on news that the front runner in the French presidential election, Emmanuel Macron, wasn’t likely to undertake any extreme reforms, said Ben Kwong Man-bun, director of KGI Asia.

“However, investors need to trade cautiously as Hang Seng Index futures will have their settlement day this week. In addition, people are not sure if North Korea will conduct any more missile tests. These will bring uncertainties to the market,” Kwong added.