Hong Kong, mainland stocks retreat ahead of Trump speech, ‘Two Sessions’ meeting in Beijing

Hong Kong and mainland Chinese stocks retreated on Monday ahead of Donald Trump’s speech to the US congress on Tuesday, as investors awaited more details on the president's promises on tax reform and infrastructure spending.

The Hang Seng Index seesawed around the 24,000 mark in morning trading, ending down

0.2 per cent to 23,925 at the close, while the Hang Seng China Enterprises Index closed down 0.8 per cent to 10,330 as investors were cautious after both benchmarks last week climbed to their highest levels this year.

The financial and energy sectors were among the biggest losers on the Hong Kong bourse, with shares of three China state owned oil companies slumping. CNOOC lost 1.4 per cent to close at HK$9.25 while PetroChina shed 1.5 per cent to HK$6.02.

Energy conglomerate China Resources Power led the losses for blue chips, shedding 1.7 per cent to close at HK$14.04.

Major financial stocks lost ground after Hong Kong Exchanges and Clearing Limited reported on Monday that its profit for 2016 tumbled 27 per cent year on year to HK$5.77 billion. Bank of China Hong Kong lost 0.2 per cent to HK$31 while Hang Seng Bank shares fell 0.4 per cent to HK$159.4.

“Investors now are generally awaiting Trump’s Tuesday speech as well as China’s annual ‘Two Sessions’ in Beijing in early March that is expected to reveal more details of the country’s future economic plans,” said Kingston Lin King-ham, director of securities brokerage AMTD.

The Two Sessions meetings on March 3 and March 5 in Beijing, attended by China’s top legislative and advisory bodies, are seen as the nation’s most important annual political meetings which can provide clues to the country’s future policy direction.

The meetings this year are expected to announce a framework to support exports related to infrastructure projects for the One Belt, One Road initiative rolled out by Chinese president Xi Jinping.

China Mengniu Dairy Company was the best performer among the 50 blue chips, with its shares rising 2 per cent to HK$15.44 at the close.

Shares of two Chinese property developers ended mixed after news that Logan Property and KWG Property paid a record HK$16.86 billion for a plot of residential land at Ap Lei Chau in Hong Kong, beating market expectations.

Logan Property added 1.2 per cent to HK$ 3.39 while KWG Property slid 4.1 per cent to HK$4.93.

Mainland China stocks also retreated on Monday after the country’s top securities regulator said the market would see tighter regulations and hinted at a looser grip on new share offerings. The Shanghai Composite Index closed 0.8 per cent lower at 3,228 while the Shenzhen Component index shed 0.9 per cent to close at 10,353.

The large-cap CSI 300 Index fell 0.8 per cent to 3,446 while Nasdaq-like ChiNext lost 0.6 per cent to 1,926.

Chinese delivery services company SF Express saw its shares rise 10 per cent to 60.73 yuan at the close, extending a three day winning streak.

Companies partly owned by Baoneng Group and China Evergrande Group fell following punishment by China’s insurance regulator for the parent firm’s aggressive share purchasing in the A-share market.

Evergrande-backed Langfang Development Co slumped 7.2 per cent to 21 yuan while Baoneng-backed CSG Holding lost 4 per cent to 11.6 yuan.