Update | Heightened Middle East tension, possibility of steeper Fed rate rises weigh on Hong Kong stocks
Benchmark Hang Seng Index ends day 0.22 per cent lower at 30,831.28
Hong Kong stocks fell on Thursday, led by Tencent, AIA and Galaxy as escalating geopolitical tension in the Middle East and the Federal Reserve leaning towards faster pace of interest rate rises weighed on investor sentiment.
The Hang Seng Index finished down 0.22 per cent, or 66.43 points, at 30,831.28, with its turnover shrinking to HK$100.97 billion (US$12.86 billion) from Wednesday’s HK$132.98 billion. The Hang Seng China Enterprises Index fell 0.29 per cent or 35.82 points to 12,288.86.
Major blue-chip stocks were weak. Chinese online major Tencent Holdings declined 1.53 per cent to HK$413.20, knocking off 45 points off the benchmark index. Galaxy Entertainment Group was the worst performing blue chip, sliding 2.95 per cent to HK$70.85.
Financials also performed poorly. AIA Group dropped 1.40 per cent to HK$70.60, China Life Insurance lost 0.45 per cent to HK$21.95 and China Construction Bank edged down 0.12 per cent to HK$8.12.
Chinese property developers fell as Bank of America Merrill Lynch downgraded Country Garden Holdings and China Vanke. The shares of the companies dropped 0.24 per cent to HK$16.70 and 0.57 per cent to HK$34.70 respectively. China Evergrande Group also tumbled 2.85 per cent to HK$27.30.
Some external factors have weakened investor confidence, analysts said.
“The Fed’s March meeting minutes indicated it is leaning towards a faster pace of interest rate rises, while most officials were worried about the impact of a trade war on the US economy,” said Sam Chi-yung, a senior strategist for South China Financial Holdings.