Hong Kong stocks end lower, weighed by profit-taking in Tencent and financial shares

The Hang Seng Index fell 0.3 per cent to 28,907.60, reversing from a more than 100 point gain in the morning session

PUBLISHED : Wednesday, 08 November, 2017, 9:13am
UPDATED : Wednesday, 08 November, 2017, 10:30pm

Hong Kong stocks ended lower on Wednesday, as investors took profits in tech shares including Chinese internet giant Tencent and financial stocks, after the index rose to a fresh 10-year intraday high in the morning.

The Hang Seng Index fell 0.3 per cent, or 86.74 points, to close at 28,907.60, reversing from a gain of 123 points that briefly took the share benchmark to 29,100 in the morning session.

The Hang Seng China Index, also known as the H-share index, declined 0.6 per cent, or 69.4 points, to 11,576.13. Turnover surged 20 per cent from Tuesday to HK$139.5 billion.

“The initial trading of China Literature boosted market sentiment in the morning,” said Stanley Chan, a director of research at Emperor Securities.

Shares of China Literature, internet giant Tencent Holdings’ online publishing arm, soared nearly 90 per cent, making it the city’s hottest initial public offering in a decade.

Investors later took profits in Tencent and Hong Kong Exchanges and Clearing, whose third-quarter profits were in line with expectations, Chan said. “Investors are turning somewhat cautious as the Hang Seng Index has risen to a very high level.”

The benchmark index has rallied 29 per cent since the beginning of this year, making it the best performer among Asia’s major markets.

Among stocks with the biggest turnover, Hang Seng Index heavyweight Tencent fell 1.4 per cent, ending an eight-session winning streak.

Hong Kong Exchanges and Clearing, the operators of the city’s bourses, dropped 0.6 per cent despite reporting a 32 per cent jump in third-quarter net profit.

Other financial shares also fell broadly. HSBC, the seventh largest bank in the world by assets, shed 0.6 per cent. Industrial and Commercial Bank of China declined 0.8 per cent, and Ping An retreated 1.2 per cent.

Geely Auto fell 0.6 per cent after it said its subsidiary will buy industrial complexes from its parent for about 1.8 billion yuan (US$271 million).

Apple suppliers Sunny Optical and AAC Technologies bucked the down trend. Sunny Optical, which supplies smartphone components for Apple, jumped 5.6 per cent after UBS and Bank of America Merrill Lynch lifted its target price. AAC Technologies, an acoustic component supplier, also rose 1.7 per cent.

Mainland Chinese markets were little changed on Wednesday. The Shanghai Composite Index edged up 0.1 per cent, or 1.89 point, to 3,415.46, while the CSI 300 was down 0.2 per cent at 4,048.01.

The Shenzhen Composite Index was little changed at 2,013.71, while the Nasdaq-style ChiNext added 0.4 per cent to 1,866.14.