Hong Kong, mainland stocks fall, mirroring Wall St drops on North Korea tensions

Insurers led losses, with banks also suffering. Clear exception was Wanda Hotel Development, after hotels deal confirmed

PUBLISHED : Thursday, 10 August, 2017, 9:20am
UPDATED : Thursday, 10 August, 2017, 11:21pm

Shares in Hong Kong fell the most in one month on Thursday, led by financials and insurers as US-North Korean relations heated up.

The Hang Seng Index slumped 1.1 per cent, or 313.09 points, to 27,444.00. That was the biggest decline since July 4. The Hang Seng China Enterprises Index slid 1.7 per cent, or 180.40, to 10,782.20, in the biggest drop since March 22.

“Today’s slide in the market was very sharp and fast that triggered stop losses. Investors saw the stock market peaking after previous strong gains and got out of their positions with any excuse or reason they have,” said Alex Wong, director at Ample Finance Group.

All major sectors lost ground with insurers leading the declines. China Taiping dropped 3.8 per cent to HK$24.00 and NCI lost 2.9 per cent to HK$51.65. Manulife fell 1.3 per cent to HK$156.10 .The Canadian insurer has seen a 78 per cent net profit growth in the last quarter, according to its latest earning result.

Banks also dragged the markets lower, with HSBC losing 1.5 per cent to HK$76.50, China Construction Bank declining 1.8 per cent to HK$6.44 and Bank of China (Hong Kong) was down 0.8 per cent to HK$38.85.

Internet giant Tencent halted a 4-day gain, falling 1.1 per cent to HK$326.6.

Wanda Hotel Development bucked declines however, climbing 19.8 per cent to HK$1.39 after the company resumed trading. The company said it would buy property and tourism assets from Dalian Wanda Group chairman Wang Jianlin.

Mainland exchanges pared some of their earlier losses as a sell-off in large-cap stocks in steel, coal and non-ferrous metals companies outweighed gains in the military and national defence sectors. The CSI 300 Index slipped 0.4 per cent, or 15.12 points, to 3,715.92 and the Shanghai Composite Index was modestly down 0.4 per cent

Gold advanced to the highest in two months after demand for haven assets surged as tensions escalated between the US and North Korea.

China’s yuan however rose to the highest in 11 months after improving sentiment in the economy’s fundamentals. Hong Kong’s dollar was little changed.

US Secretary of State Rex Tillerson said on Wednesday in the final hour of trading On Wall Street that a war between the two nations is not imminent. The Dow recovered from earlier loss but still closed down 0.2 per cent, or 36 points, lower to 22,048.7 on Wednesday.

Investors, meanwhile, will be closely watching US inflation data being released on Friday, which is expected to give clues to the country’s future monetary policy.

UK factory output for June and France industrial production are due also on Thursday.

In other Asian markets , Japan’s Nikkei 225 inched down 0.1 per cent and South Korea’s Kospi fell modestly by 0.4 per cent.