Hong Kong stocks slip into negative territory, led lower by declines in banks and insurers

Market analysts cite technical resistance as a factor in the downbeat session; investors to focus on interim corporate earnings in coming weeks

PUBLISHED : Thursday, 26 July, 2018, 11:23am
UPDATED : Thursday, 26 July, 2018, 5:23pm

Hong Kong stocks ended lower on Thursday, shrugging off an overnight rally on Wall Street after the US and European Union agreed measures to avert a transatlantic trade war.

The Hang Seng Index finished the session down 0.5 per cent, or 139.76 points, to 28,781.14. The Hang Seng China Enterprises index fell 0.5 per cent, or 52.81 points, to 11,021.35.

“The market had some correction after four days of gains,” said Stanley Chan, director of research at Emperor Securities. “The Hang Seng Index hit key resistance of 29,200. Overall the sentiment remained good, however people are still concerned about the trade war progress and there is some profit taking.”

Analysts said investors are looking ahead to interim corporate earning results due out in coming weeks.

“Corporate earnings have so far remained solid in the interim results, we are seeing quite a lot of positive profit alerts from H shares. This can boost market sentiment next week,” said Chan.

The Shanghai Composite Index fell 0.74 per cent, or 21.42 points to 2,882.23 while the CSI 300 – which tracks large companies listed in Shanghai and Shenzhen – dropped 1.2 per cent, or 41.50 points, to 3,536.25.

The Shenzhen Composite Index lost 0.9 per cent, or 14.99 points to 1,609.73 while the ChiNext shed 1.61 per cent, or 26.20 points to 1,606.12.

In Hong Kong, internet giant Tencent Holdings was lower by 1.32 per cent to HK$374.80. The company’s shares saw the highest turnover of the day, reaching HK$8.4 million (US$8.03 billion)

“Tencent remained weak since quite a lot of brokers downgraded their targets,” said Chan. “The market remained a little bit worried about their mobile gains in the second quarter.”

AAC Technologies Holdings lost 0.8 per cent to HK$100.10, and Sunny Optical was down 2 per cent to HK$137.40.

Financials were also soft. HSBC Holdings was down 0.4 per cent to HK$74.75, AIA Group eased 0.9 per cent to HK$68.30 and PICC Property & Casualty dropped 1.6 per cent to HK$8.6.

Geely Automobile Holdings lost 3.3 per cent to HK$19.04.

Road King Infrastructure climbed 7.1 per cent to HK$15.32, rising for a third straight day. On Wednesday, it announced a positive profit warning, with sales up 17.77 per cent on year, at about 18.7 billion yuan (US$2.8 billion) for the six months ended June 30. The result was boosted by property sales of 17.225 billion yuan and toll revenue of 1.47 billion yuan.

“Over the past two days the property market has been strong mainly because this sector is a laggard recently. Now investors think the interest rate hike may not be that much, especially in 2019,” said Chan.

Among other property developers, Longfor Group Holdings gained 3.5 per cent to HK$23.55, Logan Property Holdings lost 1.54 per cent to HK$10.26, having broken a monthly high of HK$10.82 earlier in the day, and Shimao Property Holdings was 0.88 per cent higher at HK$22.85.