Hong Kong stocks fall the most in two weeks as AIA reports worse-than-expected decline in new business
- AIA blames virus for hampering face-to-face policy sales
- US suspends extradition treaty with Hong Kong, souring sentiment
Hong Kong stocks fell the most in nearly two weeks as insurance giant AIA reported a worse-than-expected decline in new business and the US suspended extradition and other pacts with the city over its new national security law.
Other insurance providers fell in tandem. China Life Insurance dropped 2.1 per cent, while Ping An decreased 1.1 per cent.
The Hang Seng Index fell 1.5 per cent to 24,791.39 on Thursday.
“The two sides have agreed to hold a call in the coming days,” said spokesman Gao Feng on Thursday when asked when the talks would be held.
“These agreements covered the surrender of fugitive offenders, the transfer of sentenced persons, and reciprocal tax exemptions on income derived from the international operation of ships,” said Morgan Ortagus, the State Department spokeswoman.
Those latest steps by the administration of US President Donald Trump weighed on sentiment in Hong Kong, said Alan Li, portfolio manager at Atta Capital.
“The US suspended three bilateral treaties yesterday. Investors seem sick of too much noise and the unfriendly attitude from Trump in the near term, and tend to be risk off,” said Li.
Meanwhile, the Shanghai Composite Index retreated 1.3 per cent to 3,363.90.
Sentiment was weak after the US Federal Reserve held back from providing guidance on the future path of interest rates and the US halted its pacts with the city on extradition, shipping and taxes.
“The Fed minutes tempered expectations for more near-term monetary easing,” said Stephen Innes, chief global markets strategist at AxiCorp. “The July FOMC meeting minutes released overnight revealed a Committee aiming to wrap up the policy review in the ‘near future’. Still, they did not see an urgent need to provide additional accommodation imminently.”
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“The US markets [overnight went] down, so the Hong Kong market shares the negative sentiment,” said Louis Tse Ming-kwong, managing director of VC Asset Management. “Blue chip stocks like AIA reported disappointing interim results, which impacted the market a lot.”
Alibaba slid 0.2 per cent ahead of its earnings, as did developer Henderson Land, which fell 1.5 per cent.
Only six stocks of the 50 constituents on the benchmark Hang Seng Index closed with gains.
Stocks related to the agricultural planting sector fell 5.1 per cent on the mainland, according to a gauge compiled by Xuangubao.com.
Apple suppliers rose on the mainland. Analysts at Morgan Stanley wrote in a note that Apple had “significant iPhone upgrade potential in China”, and expected shipment growth in the country to “meaningfully accelerate” in the next fiscal year.
Apple AirPod maker Goertek shot up 6 per cent, while Luxshare Precision rose 2 per cent. Suzhou Anjie Technology, a maker of functional devices, rose 2.8 per cent, while glass cover maker Lens Technology rose 3.6 per cent.
Meanwhile, Kweichow Moutai, the liquor giant that is one of the most heavily traded mainland stocks on the Stock Connect, slipped 1.4 per cent to 1,664 yuan.
Two companies debuted in the mainland.
Diagnostic product manufacturer Guangzhou LBP Medicine Science & Technology rocketed 98 per cent on the Star Market, where there are essentially no limits on price movements during the first week. Shanghai Gentech, which manufactures delivery equipment, also soared 111 per cent on the Star Market.
Additional reporting by Ji Siqi and Deb Price
