Mainland China stocks post slight gains on Thursday after two days of loses
- Shanghai Composite Index adds 0.4 per cent at the close after rising as much as 1.1 per cent during the day
- Hong Kong’s Hang Seng Index falls for a second day
Mainland China stocks ended slightly ahead on Thursday after two days of losses, giving up most intraday gains as the market awaited further evidence that growth in China’s economy and corporate earnings will pick up.
The Shanghai Composite Index added 0.4 per cent, or 10.82 points, to 3,101.46 at the close after rising as much as 1.1 per cent. Trading volumes on the Shanghai exchange were about 6 per cent below its 10-day average, according to Bloomberg. In Hong Kong, the Hang Seng Index fell for a second day, with China Mobile declining.
The Shanghai benchmark has been range bound over the past two weeks, with share price gains slowing, as some traders pulled out of equities to cash in on a 24 per cent rally in the gauge this year. UBS Group said the pattern would probably persist until March economic data provides more clues about fundamentals. Meanwhile, Haitong Securities said the current scenario looked a lot like the build-up to bull markets in 2005 and 2015, which was characterised by sector rotations that were followed by significant pullbacks.
“There have been lots of thematic investments going on these days,” said Wang Chen, a partner with Xufunds Investment Management in Shanghai. “But these plays aren’t strong enough to take the market to a higher level. To achieve that, we’ll need to see an improvement in fundamentals, particularly a pickup in earnings growth.”
Cable TV operators were in the news after state-owned China Broadcasting Network signed a strategic agreement on Thursday with Alibaba Group Holding and Citic Group for network integration. The three sides will cooperate in areas of network integration, and upgrade and turn the cable TV network into a national one, according to a statement by the National Radio and Television Administration. Alibaba owns the South China Morning Post.
Shaanxi Broadcast & TV Network Intermediary Group surged by the 10 per cent daily limit to 12.27 yuan. Beijing Gehua CATV Network and Shanghai Oriental Pearl Group also jumped by that much to 12.95 yuan and 13.65 yuan, respectively.
Liquor distillers were among the day’s worst performers, providing a drag on the index. Shede Spirits shed 1.8 per cent to 29.77 yuan and Shanxi Xinghuacun Fen Wine Factory dropped 1.5 per cent to 56.83 yuan.
In Hong Kong, the Hang Seng Index fell 0.9 per cent, or 249.41 points, to 29,071.56. The Hang Seng China Enterprises Index retreated by 0.9 per cent as well.
China Mobile slumped by 4.8 per cent to HK$83.10, after the country’s biggest mobile phone carrier did not clarify its plan on a fifth-generation network in its annual report. Its net income increased by 3 per cent from a year earlier to 117.8 billion yuan (US$17.6 billion) in 2018, it said. It was the worst performer on the city’s stock benchmark, accounting for about a third of the loss on the Hang Seng Index.
CSPC Pharmaceutical Group, a Chinese generic and innovative drug maker, surged by 3.6 per cent to HK$15, and was the biggest gainer in Hong Kong. The company completed the first-time stock sales of its food additive and health supplement unit, which will start trading on Shenzhen’s ChiNext board on Friday.
Henderson Land Development rose by 2.4 per cent to HK$47.20, after Lee Shau-kee, Hong Kong’s second-richest man, signalled on Wednesday he will retire as the chairman and managing director of the property developer and hand over control to his two sons, each of whom has been in a senior management role at the company for at least a decade.
