Financials led by StanChart and HSBC drag Hong Kong index lower
Shares of energy companies buoyed by rise in crude oil prices
Hong Kong stocks fell for a third time in four days on Thursday, as traders sold financial companies to take profits from the best-performing sector this quarter after their earnings releases.
The Hang Seng Index retreated 0.3 per cent, or 75.42 points, to 28,518.64 at the close. The Hang Seng China Enterprises Index, or the H-share gauge, also fell 0.3 per cent to 11,598.36. Mainland’s stock benchmark fell for the first time in three days.
A measure of financial stocks on the Hang Seng Index dropped 0.7 per cent on Thursday for the biggest decline among industry groups. Even after the loss, it still remains 4.5 per cent up this quarter, the best performer among the four sub-indexes under the Hang Seng gauge, as investors bought banks and insurers as a proxy for China and global economies that are all showing signs of strength in growth.
“The market had a lot of expectations on the performance of banks, and their recent earnings reports mostly matched the expectations,” said Gordon Tsui, managing director of Hantec Pacific. “Investors are now selling stocks to take profits.”
HSBC Holdings lost 1 per cent to HK$75.85 and AIA fell 0.8 per cent to HK$59.65.
Standard Chartered tumbled 5.9 per cent to HK$73.55, despite posting a 78 per cent jump in pre-tax profits for the third quarter on Wednesday.
ZhongAn Online Property and Casualty Insurance, China’s first internet-only insurer, lost 1.3 per cent to HK$77.30, trimming its gain to 29 per cent since its debut in September. The company will probably be picked by the government as one of the two H-share companies in a trial programme to convert non-tradeable shares held by big shareholders into ordinary ones that can be freely bought and sold on the Hong Kong stock market, Caixin reported, citing unidentified sources.
About 80 per cent of the stake in the insurer are non-tradeable now and held by big shareholders including Ant Financial and Tencent Holdings.
Energy producers surged, powered by a rally in crude oil prices. On Wednesday Brent crude oil futures contracts traded close to the highest level since June 2015.
PetroChina, the nation’s largest oil and gas producer, gained 3.7 per cent to HK$5.30. CNOOC, China’s largest offshore oil producer, rose 3.4 per cent to HK$10.96, as Goldman Sachs raised its target price by 2.2 per cent to to HK$11.75.
Billionaire Li Ka-shing’s CK Asset Holdings rose 3.6 per cent to HK$67 after saying it had sold The Center tower in Hong Kong for a record HK$40.2 billion (US$5.15 billion) to a consortium on Wednesday in the world’s most expensive property transaction.
In the mainland, the Shanghai Composite Index declined 0.4 per cent, or 12.6 points, to 3,383.31. A ChiNext gauge of smaller companies fell 1.3 per cent to a one-month low.
Shares of Chinese suppliers of US electric car maker Tesla tumbled after chief executive Elon Musk said that the company would not open a widely anticipated factory and make cars in China until 2020.
“Don’t set your watch by this,” Musk said during an earnings call on Wednesday. “There’s a rough target of starting production in the next three years, and it will be serving the China market and some of the surrounding region.”
Ningbo Xusheng Auto Technology, an electric car parts manufacturer and major Tesla supplier, plummeted the maximum allowed 10 per cent to 52.25 yuan in Shanghai. Tianjin Motor Dies also plunged 10 per cent to 7.93 yuan in the morning session before trading was suspended for the rest of the day.
Shanghai Lingang Holdings, a government-owned developer of industrial parks, also sank 10 per cent to 30.45 yuan. Tesla had reached an agreement with the Shanghai government last month to build a factory in Lingang district, located in the city’s free trade zone, The Wall Street Journal reported.