Weak earnings led by Xiaomi keep gains in check in Hong Kong as investors await trade war developments
- Xiaomi, Hong Kong and China Gas, Geely and Bank of Asia disappoint investors with earnings reports
- Kweichow Moutai racks up eighth consecutive trading day above 1,000 yuan
Weak earnings by Chinese smartphone giant Xiaomi as well as Hong Kong and China Gas weighed on the Hang Seng Index, with the ongoing US-China trade war being blamed for at least part of their difficulties.
Even so, the Hang Seng Index managed to eke out a small gain on Wednesday, closing ahead 0.15 per cent, at 26,270.04.
The Shanghai Composite also held on to a teensy gain – a mere 0.01 per cent, which left it at 2,880.33. The Shenzhen Composite Index ended down a bit, by 0.09 per cent, at 1,572.62.
“The [Hong Kong] market has no clear direction after a significant rebound on Monday, and decreasing turnover affirms that,” said Alan Li of Atta Capital. “The Hang Seng is likely back to go back to a boring status until some progress is seen in the trade war negotiation or there is a further rate cut by (the US Federal Reserve).”
Hong Kong and China Gas, the city’s dominant piped-gas provider, closed down 5.3 per cent, at HK$16.20, making it the top loser on the benchmark. It posted an 18.8 per cent fall in net profit year on year to HK$3.89 billion for the year’s first half.
It got other bad news: Daiwa cut it to hold from outperform, and lowered its target price to HK$17.90 from HK$18.50. Goldman Sachs reiterated its neutral rating on the stock, but lowered its target price to HK$15.95 from HK$17.12.