Hong Kong Stock Exchange

Hong Kong stocks bite back on first trading day in the Year of Dog

Hang Seng Index tumbles 0.8 per cent in post-holiday trading

PUBLISHED : Tuesday, 20 February, 2018, 11:43am
UPDATED : Tuesday, 20 February, 2018, 11:06pm

Hong Kong stocks ended lower on the first trading day after the Lunar New Year break, dragged by HSBC and mainland Chinese banks, while equity markets in the mainland remain closed and will reopen on Thursday.

The benchmark Hang Seng Index dropped 0.78 per cent, or 241.8 points, to 30,873.63, after see-sawing during the day. The Hang Seng China Enterprises Index, or the H-share gauge, fell 1.11 per cent.

“The [Hong Kong] market rebounded quite strongly, nearly 1,000 points, before the Lunar New Year break and it almost touched 33,000 this morning, so it’s reasonable that some investors are taking profits,” said Louis Tse, managing director at VC Asset Management.

HSBC, Hong Kong’s largest bank, tumbled 3.11 per cent to HK$80.95, after the index heavyweight reported mixed results for 2017 during the midday break.

Bucking a six-year decline in annual revenues, the bank said its adjusted revenues for 2017 stood at US$51.5 billion, up 5 per cent on year. After adjusting for foreign currency translation and one-off items, its full-year profit before tax was US$21 billion, 11 per cent higher than the equivalent figure last year, beating the US$19.59 billion expectation among analysts and reversing the decline in 2016.

However, the bank did not announce additional share buy-back plans as expected. Its earnings for the fourth quarter were also disappointing. The bank has bought back US$5.5 billion worth of shares since August 2016. 

Hang Seng Bank, a subsidiary of HSBC and Hong Kong’s third largest bank by assets, lost 1.61 per cent to HK$189.20.

Consumer and IT stocks mostly rallied on Tuesday. Sunny Optical Technology, China’s largest manufacturer of smartphone camera modules and lenses, rose 2.58 per cent to HK$131.30.

IMAX China surged 10 per cent to HK$24.20 following strong box office receipts in China during the holiday. Meitu, the company behind a popular selfie-enhancing app in China, added 2.31 per cent to HK$10.20.

Turnover for main board was HK$107.84 billion, compared to HK$176.82 billion on January 31, as many investors are still on holiday and Stock Connect remains closed.

“Today’s result can’t represent the sentiment of most investors as many of them are still on holiday,” said Ji Mo, chief economist for Asia excluding Japan for Amundi Hong Kong. “Next Monday will do a better job in telling investors’ sentiment.”