Hang Seng Index takes a hit from bleak earnings outlook as investors worry over impact of protests on economy
- On the mainland investors seek refuge in consumer stocks, sending liquor maker Kweichow Moutai above 1,100 yuan for the first time
- Utilities, property and consumer staples take a hit in Hong Kong
Hong Kong stocks fell on Thursday, weighed down by concerns over the unprecedented social unrest and a bleak outlook for corporate earnings for the rest of the year.
The Hang Seng Index closed down 0.8 per cent at 26,048.72 points, and the Hang Seng China Enterprises Index, which tracks mainland China-incorporated companies, slid 0.5 per cent to 10,122.9.
Real estate, utilities and consumer staples led the decline, as several blue-chip stocks reported disappointing first-half results and cited the months-long protests as a negative factor.
“No one knows when the protests will end. The social unrest will hurt Hong Kong’s economy. I worry that in the third quarter, we will have negative GDP growth and we will fall into recession,” said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.
The Hang Seng Index is seeing selling pressure at about 26,200 points, Wen said. “Investors think further upside may be very limited above that level.”
Meanwhile, stocks in China ended slightly higher with a boost from consumer stocks, as investors sought protection from the year-long US-China trade war.
The Shanghai Composite Index closed up 0.1 per cent at 2,883.44 points, and the Shenzhen Composite Index rose 0.4 per cent to 1,578.91 points.