Hong Kong stocks fall as Apple warns of coronavirus impact and HSBC misses 2019 earnings estimate
- Shanghai Composite ekes out small gains as economic uncertainties mount about the coronavirus outbreak
- Ping An Good Doctor, Ali Health buck trend in Hong Kong, on investor hopes lockdown will lead new users to stick with online health platforms
Hong Kong stocks fell as sentiment soured after US tech giant Apple warned the coronavirus outbreak will hurt its March quarter target and HSBC missed its 2019 earnings estimates.
The Hang Seng Index declined 1.5 per cent Tuesday to 27,530.20. Of its 50 member constituents, 48 posted losses, led by property stocks, according to gauges, followed by commerce and industry, finance and utilities.
Index heavyweight Tencent, the gaming and social media giant, slid 2 per cent to HK$408.20.
Meanwhile, as China juggles the goals of getting workers back into factories and stopping the spread of the coronavirus, the Shanghai Composite Index eked out a teensy gain of 0.05 per cent to 2984.97 and the Shenzhen Component Index rose 0.6 per cent to 11,306.49.
However, the CSI 300 gauge of large-cap stocks listed on Shanghai and Shenzhen shed 0.5 per cent to 4057.51.
In Hong Kong, profit taking took hold, with the 28,000-point level proving to be a “significant resistance point” for the Hang Seng Index, said Kenny Wen, wealth management strategist at Everbright Sun Hung Kai.
“HSBC results also were not positive news for market sentiment,” he said.
The last time the Hang Seng breached that level was January 22, when it closed at 28,341.04.
HSBC, the largest of three currency issuing banks in Hong Kong, reported a loss of US$5.5 billion in 2019, compared with a profit of US$1.5 billion in the prior year period. Its stock fell 2.8 per cent to HK$57.75.
Apple’s warning that it is “experiencing a slower return to normal conditions” from its suppliers based in China and expects to not meet its earlier upbeat revenue guidance for the first quarter rattled Chinese smartphone and AirPod component manufacturers.
Luxshare Precision fell 0.7 per cent to 45.85 yuan, while GoerTek declined 2.3 per cent to 23.43 yuan.
In Hong Kong AAC Technologies, which derives half of its revenue from Apple, tumbled 3.7 per cent to HK$56.70.
Other stocks also experienced pressure.
Chinese smartphone maker Xiaomi fell 3.5 per cent to HK$12.82.
Alibaba, the e-commerce giant and parent company of the South China Morning Post, fell 1.6 per cent to HK$214.
Online health care leaders bucked the downward trend, as investors continued to bet the unprecedented lockdown of more than 50 million people in China could mark a key moment in the use of online health care services.
Ping An Good Doctor rose 1.8 per cent to HK$78.60, while Ali Health climbed 1.4 per cent to HK$14.80.
On the mainland, Gree Electric, the country's biggest air-conditioner manufacturer, had to quarantine employees after a bus driver was found to have had close contact with a suspected coronavirus case. Its stock tumbled 1.5 per cent to 62.16 yuan.
More than 130 employees of Chongqing Titanium Industry, a unit of Pangang Group, were quarantined and the factory was force to halt production after two of its staff were confirmed to be infected at the start of last week. It slipped 1.2 per cent to 2.58 yuan.
Kweichow Moutai, the world’s most valuable liquor company, fell 0.9 per cent to 1,084 yuan.
At a time when the market is sensitive to coronavirus news and annual results reporting, investors should accumulate stocks with solid fundamentals, said Louis Tse Ming-kwong, managing director at VC Asset Management.
Tse likes logistics and road management company Shenzhen International, which has fallen close to HK$16 from HK$18 on January 20, with a historic yield of 6.75 per cent. The stock gained 0.9 per cent to close at HK$15.86. He was also positive about China Communications Services, which is backed by the state to set up 5G technology infrastructure. The stock fell 1.2 per cent to HK$5.93.
