Hong Kong Stock Exchange

Hong Kong, mainland stocks end week flat as interest rate jitters remain

Hang Seng closes 0.3pc up to 23,569. Energy stocks lose heavily after oil prices dropped below US$50 a barrel overnight on concerns a growing number of US producers may undermine efforts made by oil giants to curb a global glut

PUBLISHED : Friday, 10 March, 2017, 9:19am
UPDATED : Friday, 10 March, 2017, 10:11pm

Hong Kong stocks closed slightly higher on Friday while mainland markets remained flat as investors stayed cautious ahead of a widely-expected US interest rate rise.

The Hang Seng Index ended 0.3 per cent up to 23,569, the same finish as the end of last week, while the Hang Seng China Enterprises Index dipped 0.3 per cent to 10,069.

Initial optimism towards China’s economy brought by the annual parliamentary meeting has been offset by worries that a US rate rise next week will make Chinese stocks less attractive.

“Now all eyes are on the Fed rate rise,” said Kingston Lin King-ham, brokerage director at AMTD Securities.

“All that matters is the timing. If the Fed decides to raise the rate in June or July, the Hong Kong bourse will see a high possibility of capital outflows and people will have to deal with it then.”

Energy stocks lost heavily after oil prices dropped below US$50 a barrel overnight on concerns that a growing number of US crude producers may undermine the efforts made by oil giants to curb a global glut.

China Shenhua Energy shed 3.1 per cent to HK$15.4 while Sinopec lost 1.5 per cent to HK$5.8. PetroChina dropped 1.4 per cent to HK$5.7.

Shares in local retail landlord Wharf Holdings surged 8.7 per cent to HK$67.7 after it reported a 25 per cent increase in core annual earnings for last year helped by rising property income from both Hong Kong and the mainland.

The firm’s gains also followed its announcement on Thursday it would get rid of its struggling i-Cable unit, the city’s first pay-TV service. i-Cable shares plunged 34.4 per cent to HK$0.6.

Geely Auto climbed 6.2 per cent to HK$11.9 after Goldman Sachs reiterated its “buy” rating, citing the company’s transformation into a global player. The car maker gained 11.4 per cent in its first week as a Hang Seng Index component.

In the mainland, the Shanghai Composite Index closed up 0.1 per cent to 3,213 while the blue-chip CSI 300 was little changed.

The Shenzhen Component Index gained 0.3 per cent to 10,451, and the Nasdaq-like ChiNext shed 0.2 per cent to 1,950.

Shares in banks and pesticide companies led the declines, while home electronic appliances firms were the biggest winners on mainland bourses.

Appliance maker Midea Group closed 3.9 per cent up to an all-time-high of 34.2 yuan. Gree Electric Appliances, a leading air conditioner maker, rose 2.0 per cent to 29.0 yuan.

Shares in iFlytek, an artificial intelligence company specialising in voice-recognition software, climbed 1.9 per cent to 34.2 yuan after its chairman demonstrated the products to Premier Li Keqiang at China’s plenary meeting.

Several Chinese companies debuted on the mainland bourses on Friday, including Guangku Photoelectricity Technology which rose 44 per cent to its daily limit, when trade was temporarily halted. Shenzhen-headquartered Daqian Technology and Landscape also saw their shares rise more than 40 per cent on their debuts.

US stocks closed flat on Thursday, as the energy sector rebounded despite the slump in oil prices.

The S&P 500 energy index rose 0.6 per cent, snapping two days of sharp losses, while the Dow Jones Industrial Average added 0.01 per cent to 20,858. The Nasdaq Composite also gained 0.02 per cent to 5,838.

Investors have been awaiting the February nonfarm payrolls report to be released on Friday. The data will be seen by many as a final and decisive signal as to whether the Federal Reserve will rise the interest rate next week.

Japan’s Nikkei 225 gained 1.5 per cent to 19,605 as the yen continued to weaken against the US dollar. Kospi in South Korea added 0.3 per cent to 2,097 after the country’s Constitutional Court removed President Park Geun-hye from office over a graft scandal.