Hong Kong, Shanghai and Shenzhen stocks fall, but ChiNext up 4.23pc

PUBLISHED : Monday, 18 May, 2015, 10:18am
UPDATED : Monday, 18 May, 2015, 6:04pm

Hong Kong and mainland stock markets retreated  on Monday, with investors becoming more cautious about the country’s economic health after the release of figures showing new home prices fell 6.1 per cent year on year last month, ignoring the glimmer of hope from a 0.3 per cent month-on-month rise – the first in 11 months.

The benchmark Hang Seng Index fell 0.83 per cent, or 231.03 points, to 27,591.25. The Hang Seng China Enterprises Index lost 0.6 per cent to 13,926.28. Turnover fell to HK$119 billion, 12 per cent below last week’s average of HK$135 billion.

The Shanghai Composite Index dropped 0.58 per cent to 4,283.49, while the Shenzhen Composite Index gave up 0.15 per cent to 14,672.63, with 1.23 trillion yuan worth of shares exchanging hands in the two markets. However, Shenzhen’s Nasdaq-style ChiNext board – which mainly captures the movement of technology stocks – rose 4.23 per cent to a record 3,278.48.

Shares in China Overseas Land & Investment shed 2.37 per cent to HK$28.85 in Hong Kong, while China Resources Land, the state-owned property company that raised US$1.3 billion in a private share placement last week - gave up 2.4 per cent to a 10-day low of HK$24.35.

Ben Kwong Man-bun, a director of KGI, said the latest mainland interest rate cut would boost property sales and help stabilise home prices. “Those stimulus measures will gradually start to take effect on the overall economy and the property market,” he said.

Winnie Chiu, senior director of markets and investment solutions at Credit Agricole Private Banking, said the operating margins of mainland property developers could grow due to an improving market in first-tier cities.

Meanwhile, investors also cashed in telecoms stocks  on Monday, after the firms announced a raft of internet and data plan price cuts in response to a call by Premier Li Keqiang.

China Mobile dropped 2.8 per cent to HK$105.90, wile China Unicom slid 2.3 per cent to HK$13.80.

Liquidity concerns may also have weighed on sentiment, with mainland brokerage Huatai Securities starting to market its share sale in Hong Kong. The company, already listed in Shanghai, could raise up to US$4.5 billion, which would make it the world’s third-largest initial public offering this year.