Hong Kong stocks can’t catch a break, as market slides lower
Hong Kong stocks ended in negative territory on Monday, as investors sought to lower risk ahead of an extended holiday break which gets underway later this week.
The benchmark Hang Seng Index ended down 47.79 points, or 0.16 per cent, to 29,459.63, reversing from modest gains earlier in the session. The index lost 3,094 points last week, reflecting its worst weekly point decline in history. The Hang Seng China Enterprises Index, or the H-shares index, was down 1.36 points, or 0.01 per cent, to 11,900.31.
“The Hang Seng Index entered correction territory last week after the US market turmoil. As trading is expected to be quiet during the upcoming Lunar New Year holiday, the market will hover around low levels for some time, before staging a true rebound in March,” said Francis Lun, chief executive officer for Geo Securities.
Hong Kong markets will close for the Lunar New Year holiday from the midday close of trade on Thursday and reopen the following Tuesday. Markets in Shenzhen and Shanghai will the close from Thursday and reopen on February 22.
Tech stocks bucked the trend and strengthened, with Tencent Holdings improving by 0.54 per cent to HK$409.6. Sunny Optical Technology advanced 3.49 per cent to HK$112.6. Meitu, the company behind China’s most popular selfie mobile application, added 3.46 per cent to HK$9.27.
Airlines rose as oil prices weakened. Cathay Pacific Airways moved 3.27 per cent higher to HK$3.27. Air China increased 5.65 per cent to HK$10.84 and China Southern Airlines added 5.22 per cent to HK$9.07.
In mainland trading, the Shanghai Composite closed 0.78 per cent higher at 3,154.13, rebounding from a 9.6 per cent loss last week – its worst weekly performance in more than two years.
The CSI300 advanced 1.29 per cent to 3,890.11, while the Shenzhen Composite Index and the start-up board index ChiNext jumped 2.65 per cent and 3.49 per cent respectively to 1,723.73 and 1,648.07.
Among tech stocks, enterprise software maker Yonyou Network Technology and Beijing Orient National Communication Science and Technology both soared by their 10 per cent daily limit to 26.73 yuan and 14.16 yuan respectively. Beijing Thunisoft, a main provider of government software in China, gained 8.01 per cent to 16.58 yuan. IT consulting firm Shanghai Baosight Software rose 6.1 per cent to 21.44 yuan.
“Technology companies rose on solid earnings as China’s stock market rebounded on good fundamentals,” said Ji Mo, chief economist for Asia excluding Japan of Amundi Hong Kong.
In New York on Friday, the Dow Jones Industrial Average ended 1.4 per cent higher at 24,190.90. The S&P 500 rose 1.5 per cent to 2,619.55, and the Nasdaq Composite Index gained 1.4 per cent to 6,874.49. The Dow and the S&P 500 both closed down 5.2 per cent for the week, the biggest drop in a year. The Nasdaq Composite posted a weekly fall of 5.1 per cent.