Hong Kong Stock Exchange

Hong Kong stocks end lower as investors await outcome of US-China trade talks, Fed meeting   

Insurers give up previous session’s gains, while IMAX jumps on upbeat China earnings

PUBLISHED : Wednesday, 02 May, 2018, 9:18am
UPDATED : Wednesday, 02 May, 2018, 11:03pm

Hong Kong stocks fell on Wednesday led by insurers, as investors remained cautious ahead of talks between the US and China this week over thorny trade issues.

The benchmark Hang Seng Index eased 0.27 per cent, or 84.57 points, to 30,723.88, while the Hang Seng China Enterprises Index lost 1.12 per cent, or 137.80 points, to 12,193.59.

Hong Kong markets resumed trading after the Labour Day holiday on Tuesday and mainland markets reopened after a four-day break.

A US trade delegation is set to visit Beijing on Thursday and Friday to discuss issues about Sino-US trade and business ties after President Donald Trump last month threatened tariffs on up to US$150 billion worth of Chinese goods.

“There is some uncertainty in the financial markets surrounding US negotiations with China on trade issues, since we do not know the outcome and what will happen to the industry,” said Gordon Tsui, head of fixed income at Talking Asset Management. “Market sentiment now is fluctuating and not positive in the short term.”

Investors will also be watching the Federal Open Market Committee. The policy-setting body of the US central bank is widely expected to keep interest rates unchanged at its meeting during US hours on Wednesday, but the market focus will be on whether there is a more hawkish policy stance on the future outlook.

Insurers mostly gave back Monday’s gains, with Ping An Insurance Group sliding 1.10 per cent to HK$76.70, China Life Insurance shedding 0.89 per cent to HK$22.30 and AIA Group losing 1.41 per cent to HK$69.70.

The sector’s biggest decliner was Chinese state-owned conglomerate People’s Insurance Co (Group) of China, which tumbled 2.68 per cent to HK$3.63. Its former president, Wang Yincheng, is awaiting sentencing after having recently pleaded guilty in a mainland court case related to bribery. 

IMAX China Holding, a subsidiary of global entertainment giant IMAX, was one of the biggest gainers, jumping 4.95 per cent to HK$27.55, after the cinema chain reported net profit in the first quarter surged to US$8.5 million, boosted by strong box office earnings from Chinese-language blockbusters released over the Lunar New Year. The conglomerate operates almost 500 cinemas in China.

Chinese lens manufacturer Sunny Optical Technology (Group) climbed 4.92 per cent to HK$136.50 and internet giant Tencent Holdings added 0.61 per cent to HK$393.40.

Meanwhile, new daily quotas for the two stock connect schemes that link markets in Hong Kong, Shanghai and Shenzhen came into effect on Wednesday. Mainland Chinese investors are now able to trade up to 42 billion yuan (US$6.6 billion) in Hong Kong stocks from 10.5 billion yuan previously, while investors in Hong Kong can trade up to 52 billion yuan worth of stocks in Shanghai and Shenzhen, up from 13 billion yuan. 

Mainland markets were soft. The SSE Composite Index in Shanghai was practically unchanged at 3,081.18, while the CSI 300 Index, which tracks the top 300 companies in Shanghai and Shenzhen, added 0.18 per cent, or 6.77 points, to 3,763.65. The Shenzhen Composite Index dipped 0.07 per cent or 1.23 points at 1,774.90 and the Nasdaq-style ChiNext Index fell 0.22 per cent, or 4.03 points to 1,801.57.