Hong Kong stocks flat as CNOOC retreats, offsetting gains in consumer sector

Hong Kong stocks ended virtually flat on Tuesday, as oil producers fell after a disappointing interim result from heavyweight CNOOC, but consumer counters were lifted by promising earnings and by speculation that more mainland cities could follow Chongqing’s example and launch stimulus packages to boost local spending.

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Published: 5:02pm, 21 Aug 2012Updated: 5:41pm, 21 Aug 2012

Hong Kong stocks ended virtually flat on Tuesday, as oil producers fell after a disappointing interim result from heavyweight CNOOC, but consumer counters were lifted by promising earnings and by speculation that more mainland cities could follow Chongqing’s example and launch stimulus packages to boost local spending.

The Chongqing city planned to inject 1.5 trillion yuan into seven industrial sectors over three years to revive the economy, China Securities Journal reported on Tuesday. The news boosted the city's local lender Chongqing Rural Commercial Bank Co., Ltd. (3618.HK) and it closed 6.73 per cent higher at HK$3.3 Meanwhile, speculation that more cities might follow suit and boost spending, lifted consumer stocks like instant noodle-maker Tingyi (Cayman Islands) Holding Corp. (0322.HK), which jumped 6 per cent to end at HK$ 22.10.

But the gains were offset by oil players led by China’s top offshore energy producer CNOOC Ltd. (883.HK). The oil giant lost 3 per cent to HK$15.10 after saying interim profit fell to 31.9 billion yuan from 39.3 billion yuan a year earlier, as the weak global economy dampened demand and crude prices slumped.

“Earnings were still the focus of the day and CNOOC disappointed investors after posting an output decline,” Kenny Tang, Hong Kong-based general manager of AMTD Financial Planning Ltd, told SCMP.com. “I think the Hong Kong market is starting to edge upwards because there was strong resistance when the benchmark index fell below 20,000, but we need more positive news to break out of the band where it's currently stagnating," he said.

The benchmark Hang Seng Index closed down 0.02 per cent at 20,100.09, while the Hang Seng China Enterprises Index, which tracks the performance of Hong Kong-listed China enterprises, rose 0.32 per cent to close at 9,825.95.

The Hong Kong market traded in a narrow 162-point range on Tuesday, with subdued turnover of just HK$42.9 billion.