Hang Seng Index

Hong Kong stocks, worst performers in Asia-Pacific, end third quarter 4 per cent lower

Shanghai Composite Index also drops for a fourth quarter in a row

PUBLISHED : Friday, 28 September, 2018, 8:40pm
UPDATED : Friday, 28 September, 2018, 10:43pm

Hong Kong-listed stocks lost 4 per cent in the third quarter, their worst quarterly performance since the fourth quarter of 2016.

The Hang Seng Index closed at 27,788.52 on Friday, dropping by 0.4 per cent in September and down for a fifth straight month. The decline means the benchmark gauge was the top loser among major equity indices in Asia-Pacific, according to data from Reuters.

The third quarter was also the index’s second straight quarter of losses. In September, the Hang Seng Index also briefly entered bear market territory amid concerns over the US-China trade war, currency turmoil in emerging markets and fear of further interest rate increases.

It touched a low of 26,613 on September 10, down by more than 20 per cent from a peak of 33,484 in January. Since then, it has recorded a small rebound.

But analysts are still cautious about the outlook in the near term. “The Hang Seng Index is unlikely to post a big rebound in October, unless there is any catalyst, such as a breakthrough in US-China trade relations,” said Ryan Chan, associate director for Eddid Securities and Futures.

If the index continues to fall, the short-term support level will be 26,500, said Chan.

The US Federal Reserve increased rates this week, as widely anticipated. In Hong Kong, HSBC, its largest bank, also raised its lending rate for the first time in 12 years.

Going forward, Chan suggested investors watch out for outflow conditions and any potential volatility in the Hong Kong dollar.

On Friday, Tencent and HSBC dropped by 0.7 per cent and 0.3 per cent, respectively, while bourse operator Hong Kong Exchanges & Clearing lost 1 per cent.

CNOOC jumped by 3.7 per cent and was the best performing blue chip stock. PetroChina and Sinopec also advanced, up 1.8 per cent and 2 per cent, respectively.

On the mainland, the Shanghai Composite Index ended up 1.1 per cent at 2,821.35 on Friday. In the past month it has gained 3.5 per cent. It, however, lost 0.9 per cent for the third quarter, in a fourth straight quarterly fall. It has declined by 15 per cent so far this year.

The tourism sector jumped on Friday, ahead of a holiday next week. China International Travel Service rose by 2.1 per cent, Xi’an Tourism advanced by 2.3 per cent and Emei Shan Tourism gained 2.1 per cent.

Shipping stocks also shined, with China Merchants Energy Shipping and Hainan Strait Shipping both surging by more than 4 per cent.