Hong Kong stocks fall to two-week closing low on lingering economic growth fear
Hong Kong stocks extended losses on Wednesday to close at their lowest in two weeks, tracking declines in the US and as investors remained cautious in the wake of China’s slowing economy that could be squeezed further in the prolonged trade war with the US.
The Hang Seng Index dropped to the day’s low of 26,840.20, before narrowing losses to close 0.1 per cent, or 35.12 points, down at 27,091.26. The volatile trading came after the benchmark index posted on Tuesday its worst daily fall of 2.4 per cent in a month.
The Hang Seng China Enterprises Index edged 0.3 per cent higher to close at 10,786.17. The gauge also fell 2.4 per cent on Tuesday in the biggest single day loss since June 19.
The total market turnover was HK$67.7 billion, substantially lower than the average daily volume of $117.4 billion in the first eight months of this year, according to data from the Hong Kong stock exchange. The mainland markets are closed until October 7 for the National Day holiday.
“The weak market sentiment is because of capital outflows from the city into the US stock markets. Since the mainland markets are closed this week, the selling pressure will be concentrated on the Hong Kong market, and there is no strong incentive for the market to rebound,” said Castor Pang Wai-sun, Core Pacific-Yamaichi’s head of research.
A weaker forecast of the Hong Kong economy also weighed on the market. Standard Chartered on Wednesday lowered its 2018 gross domestic product projection of the city to 3.6 per cent from 3.8 per cent on weaker-than-expected growth in the second quarter and the prolonged and unpredictable US-China trade war.
AIA Group was the worst performing blue chip, falling 2.6 per cent to HK$65.80 and knocking 64 points off the benchmark index.
Chinese financials edged lower. Agricultural Bank of China fell 0.5 per cent to HK$3.72. Industrial and Commercial Bank of China decreased 0.4 per cent to HK$5.51. Bank of China fell 0.3 per cent to HK$3.39.
Tencent Holdings fell 0.3 per cent to HK$316.
Gaming stocks bucked Wednesday’s broader market decline to recoup some of Tuesday’s losses, buoyed by a 2.8 per cent rise in year-on-year gaming revenue for September and a 27 per cent jump in mainland Chinese visitor number to the gambling hub on October 1 to 2, the first two days of the National Day holiday.
Sands China rose 2.6 per cent to HK$34.95, while Galaxy Entertainment Group increased 1.5 per cent to HK$48. Wynn Macau climbed 0.7 per cent to HK$17.30 per share.
“Tourism figures from Macau were better than expected, and people tend to think that more tourists to Macau generally means better performance of the gambling industry,” said Pang.