Hong Kong shares fall for fifth session as Tencent hits 11-month low on surprise drop in profit
The Hang Seng Index has lost a total 5 per cent in the last five trading sessions, while the Shanghai index closed down for a fourth straight day
Hong Kong stocks extended their losing streak to a fifth straight session on Thursday, bringing losses to a total 5 per cent, dragged down by Chinese internet conglomerate Tencent Holding, which hit an 11-month low after reporting its first profit decline in 13 years.
Mainland China shares also fell, with Shanghai briefly dropping to its worst level in 17 months before paring losses by the close on expectations US-China trade tensions might ease.
Hong Kong’s benchmark Hang Seng Index closed down 0.8 per cent at 27,100.06. The Hang Seng China Enterprises Index, a gauge of Hong Kong-listed Chinese companies, ended 0.5 per cent lower at 10,479.68.
Tencent, the most heavily weighted stock in the benchmark index, tumbled 5 per cent at the open before finishing down 3 per cent at HK$325.80, the worst close since last September. The social media to gaming giant surprised the market by reporting after Wednesday’s close that its net income fell 2 per cent in the second quarter to 17.9 billion yuan (US$2.6 billion) from the previous quarter, the first profit drop since 2005.
Tencent’s president, Martin Lau, told a briefing on the earnings that mobile gaming revenue shrank as the company had difficult getting regulatory approval for its games, which has already affected the planned mobile launch in China of the hit game PlayerUnknown’s Battlegrounds.
Other tech and internet stocks extended recent losses.
Xiaomi, the world’s fourth-largest smartphone seller, dropped to its lowest close since going public in early July, down 0.4 per cent to HK$16.24. It has fallen 4.5 per cent from its IPO price of HK$17.