Hong Kong stocks retreat with property groups under pressure while oil producers advance

Property-related stocks weakened amid lingering Evergrande concerns; Carrie Lam unveiled plan for ‘Northern Metropolis’ to spearhead development

Oil traded near the highest level in three years, buoying producers like Sinopec and CNOOC amid an energy crisis

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An electronic screen showing the Hang Seng Index level outside a bank in Central, Hong Kong on September 20. Photo: Dickson Lee

Published: 10:44am, 6 Oct 2021Updated: 4:31pm, 6 Oct 2021

Corrected [12:16pm, 6 Oct, 2021]

[12:16pm, 6 Oct, 2021]
Corrects the first paragraph to say oil prices are at a three-year high

Hong Kong stocks declined, keeping the benchmark index at one-year low as property stocks weakened despite a policy address outlined a major housing plan in the city’s north. Oil producers jumped as crude traded near a three-year high.

The Hang Seng Index lost 0.6 per cent to 23,966.49 as of the close of trading on Wednesday. The Hang Seng Tech Index tumbled 1.5 per cent, pummelled by a 7.5 per cent slump in JD Health and a 4.3 per cent loss in Sunny Optical while Tencent Holdings and Meituan also retreated. Markets in mainland China were closed for a holiday.

Country Garden’s property management unit fell 4 per cent while Wharf REIC retreated 1.5 per cent. The broader Hang Seng Properties Index slipped 0.4 per cent, as China Evergrande’s debt woes started infecting the local property players and Fantasia Holdings defaulted on a dollar bond.

“Fantasia missed debt payments, leading to fears of capital issue,” KGI Securities said in a research note on Wednesday. This weighed down stocks in the related industry, it added.

Losses were tempered by the government’s plan for a 300 sq km hub bordering Shenzhen, known as Northern Metropolis. Chief Executive Carrie Lam Cheng Yuet-ngor unveiled the plan to spearhead the city’s future development in her final policy address. New World Development and Sun Hung Kai Properties jumped by more than 1.6 per cent, trading higher after the announcement.