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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
BusinessMarkets

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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Cheryl Heng
Cheryl Heng
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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.

Oil stocks led index gainers as crude traded near US$79 per barrel after reaching a three-year high earlier this week amid an energy crisis. PetroChina advanced 4.3 per cent to HK$4.14, while Sinopec and CNOOC gained by at least 2.3 per cent.

“The recent gain in oil producers reflects a global energy shortage which has been persistent this year, but the market is expecting this to get worse as the northern hemisphere enters the winter season,” said Stephanie Leung, deputy chief investment officer at wealth management firm StashAway HK.

Other major gauges in Asia retreated. The benchmarks in Japan and South Korea fell by 1 per cent and 1.8 per cent each, while equities in Australia declined 0.6 per cent.

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