Stock Talk | HK stocks tipped to open lower; focus on earnings

Hong Kong stocks are expected to open the day lower on Tuesday in thin trade, as investors continue to focus on upcoming corporate profit to gauge the full extent of a slowdown in the Chinese economy and await more macroeconomic data from Europe and the United States.

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Published: 8:47am, 21 Aug 2012Updated: 6:03am, 7 Sep 2012

Hong Kong stocks are expected to open the day lower on Tuesday in thin trade, as investors continue to focus on upcoming corporate profit to gauge the full extent of a slowdown in the Chinese economy and await more macroeconomic data from Europe and the United States.

CNOOC Ltd. (0883.HK), China’s biggest offshore energy producer and one of the heavyweight stocks of the benchmark Hang Seng Index (HSI), are due to report half-year results on Tuesday. Separately, a batch of consumer players, including 361 Degrees International Ltd. (1361.HK), Belle International Holdings Ltd. (1880.HK) and Peak Sport Products Co., Ltd. (1968.HK) are also due to report earnings.

Hong Kong stocks slipped on Monday, with turnover falling to a five-day low, on speculation China could expand a property tax pilot program to more cities after home prices rebounded in most mainland cities in July. The HSI dropped 0.06 per cent, or 11.8 points, to close at 20,104.27, while the Hang Seng China Enterprises Index, which tracks the performance of Hong Kong-listed China enterprises, dropped 0.37 per cent to close at 9,794.86.

A local official in central China’s Hunan province, however, dismissed a media report on Monday that a new tax scheme on second homes was on track to be expanded to the region, according to a leading mainland business paper National Business Daily on Tuesday. The publication quoted an unnamed official said the region has no plan for such a property tax reform.

Overnight, the US market dipped after the European Central Bank(ECB) denied reports that it plans to cap bond yields to bring down borrowing costs and Germany’s central bank again criticised proposed ECB purchases of bonds from struggling eurozone nations, saying they would carry “substantial risks.”

Investors are eyeying a slew of data due out this week which may move markets, including euro zone producer price data for July due out on Tuesday, the HSBC Flash Manufacturing PMI for August due out Thursday, and US durable goods data for July, due out on Friday.