Hong Kong market turnover sinks to 22-month low as investors await Xi Jinping’s speech, Fed rate move

  • Hong Kong stocks end flat as investors watch from the sidelines for some key events to unfold this week
PUBLISHED : Monday, 17 December, 2018, 6:54pm
UPDATED : Monday, 17 December, 2018, 6:54pm

Hong Kong market’s turnover shrank sharply on Monday to the lowest level in nearly two years, with the key index ending marginally lower, as investors await key events to unfold later this week, including Chinese President Xi Jinping’s reform speech and the Federal Reserve’s rate decision.

The Hang Seng Index closed at 26,087.98, down 6.81 points. The Hang Seng China Enterprises Index, known as the H-share index, lost 7.62 points to 10,351.81.

Turnover on the main board decreased 17 per cent to HK$55.4 billion from Friday, the lowest level in 22 months.

On the mainland, the Shanghai Composite Index edged up 0.2 per cent to end at 2,597.97. The Shenzhen Component Index dropped 0.5 per cent to 7,592.65.

Combined turnover for Shanghai and Shenzhen markets fell 18 per cent to 238.3 billion yuan from the previous session.

Investors are keeping a close eye on several key events later this week, said Stanley Chik, head of research at Smart Securities.

“Investors expect the Federal Reserve to raise interest rates this time, but future pace of rate hikes is still uncertain,” he said.

“The market also wants to see how China is going to set course for next year’s economic growth, given recent data showed the momentum is slowing.”

On Tuesday, Chinese President Xi Jinping is expected to give a speech to commemorate the 40th anniversary of the country’s reform and opening-up, which will be closely watched by the market for clues about the country’s future direction and its relations with the US.

The annual Central Economic Work Conference is also said to take place on Wednesday, which will set the national agenda for the economy next year and could put out a pro-growth plan.

On Thursday, the Federal Reserve is set to announce its decision on interest rates following a two-day policy meeting, while also giving its projections on the pace of future increases.

In Hong Kong, utilities stocks rose, with CLP Holdings ending 1.7 per cent higher at HK$89.55.

CK Infrastructure Holdings gained 1.5 per cent to HK$59.65. Telecoms tower operator China Tower climbed 2.9 per cent to HK$1.40, the highest since its debut earlier this year.

Carmakers fell. Brilliance China Automotive Holding lost 3.1 per cent to HK$6.03. Geely Automobile Holdings fell 2.6 per cent to HK$14.10. BYD sank 4.4 per cent to HK$54.70.

On the mainland, Great Wall Motor erased 1.2 per cent to 5.81 yuan. BYD’s A shares also lost 4.2 per cent to 54.89 yuan. AGC Group edged down 0.2 per cent to 10.49 yuan.