Hong Kong market falls sharply as tech and insurance stocks plunge
Tencent led the tech stock decline, sliding 3.3pc on Thursday, as the HSI closed lower for a fourth day
Hong Kong stocks fell sharply on Thursday, dragged down by technology firms such as Tencent, and insurers.
The Hang Seng Index dropped for a fourth day, closing down 1.51 per cent, or 446.48 points, to 29,177.35, and the Hang Seng China Enterprises Index fell 1.48 per cent, or 172.26 points, to 11,475.72.
“I think market pressure is increasing because most of the market leaders face particular pressures near the year end, as most of them have accumulated a lot of gains. But I think the outlook is not too bad and there is strong support at the 29,000 level,” said Jun Yang Securities’ chief executive Kenny Tang Sing-hing.
“Near the year end, the market is likely to improve, and maybe it can gain to near the 30,000 level. But in the short term, there will be some consolidation or correction,” Tang said, adding that this was mainly being felt in the technology sector.
The tumble in technology stocks continued on Thursday, with Tencent leading the way after talks of delays to the tech giant’s new video game emerged on Wednesday. The stock, whose valued has doubled so far this year, slid 3.3 per cent to close at HK$398.00, its biggest decline since August 11.
Other major technology stocks fell. Sunny Optical Technology, China’s largest manufacturer of smartphone camera modules and lenses, slumped 6.07 per cent to HK$130.00, and AAC Technologies, a supplier of electronics components to Apple, dived 6.18 per cent to HK$156.30, making it the worst-performing blue chip.
Stocks that listed this year also dropped. China Literature, the online reading unit spun out by Tencent, slid 2.91 per cent to HK$90.00, Yixin Group fell 2.45 per cent to HK$7.17, ZhongAn Online P&C Insurance lost 1.99 per cent to HK$71.25 and Razer was 3.5 per cent lower at HK$4.13.
Insurers continued to decline, with Ping An Insurance sliding 3.75 per cent to HK$77.00 and AIA Group was down 4.02 per cent to HK$63.30. China Life Insurance was 2.69 per cent lower at HK$25.35.
Chinese property developers were hit hard too. Wanda Hotel Development dropped 4.17 per cent to HK$1.38, China Vanke fell 4.69 per cent to HK$28.45, Sunac China Holdings was 6.86 per cent lower at HK$36.00, and Longfor Properties was down 2.13 per cent to HK$18.34.
“The market rose too rapidly previously, so it means it will also correct very quickly,” said Castor Pang Wai-sun, Core Pacific-Yamaichi’s head of research. Pang said there was room for the benchmark index to fall further towards the 50-day moving average of 28,648.43 in December.
China’s official November purchasing managers’ index (PMI) at 51.8, released on Thursday morning, was better than expected, suggesting that the nation’ growth momentum was holding up. It was up not only up from October’s 51.6, but also beat analysts’ estimates of 51.4.
But the improved PMI did little to boost mainland stocks. The Shanghai Composite Index fell 0.62 per cent, or 20.67 points, to 3,317.188, and the CSI 300 Index – which tracks the large caps listed in Shanghai and Shenzhen – dropped 1.18 per cent, or 47.65 points, to 4,006.10, while the Shenzhen Composite Index lost 0.9 per cent, or 17.2 points, to 1,901.86. The Nasdaq-style ChiNext fell 0.96 per cent, or 17.08 points, to 1,770.30.
Other Asian markets were mixed. Tokyo’s Nikkei 225 rose 0.57 per cent to a two-month high of 22,724.96, as financial stock gains offset a weakness in technology shares following the US overnight. But both South Korea’s Kospi were down 1.45 per cent and the Sydney All Ordinaries 0.64 per cent.