Hang Seng Index

Oil price slump hits energy stocks in Hong Kong as investors await Tencent results

  • The benchmark Hang Seng Index fell 0.54 per cent to 25,654.43 while the Shanghai Composite Index was down 0.85 per cent to 2,632.24
PUBLISHED : Wednesday, 14 November, 2018, 11:54am
UPDATED : Wednesday, 14 November, 2018, 6:34pm

Hong Kong and mainland stocks retreated on Wednesday, snapping a two-day advance as the market anxiously awaited index's heavyweight Tencent Holdings’ third-quarter results.

The benchmark Hang Seng Index fell 0.54 per cent, or 138.44 points, to 25,654. 43. The Hang Seng China Enterprises Index lost 73.55 points or 0.7 per cent to 10,405.16.

On the mainland, the Shanghai Composite Index was down 0.85 per cent to 2,632.24, while the CSI 300 Index fell 1 per cent to 3,204.94.

Social media and gaming giant Tencent, the most traded stock, closed 0.8 per cent lower, paring an earlier loss of as much as 3.4 per cent at the open.

“Firstly investors are worried as mainland authorities are considering imposing a tax on online gaming,” Louis Tse Ming-kwong, managing director at VC Asset Management said. “Many see Tencent as unable to monetise its wide reach in social media and gaming.”

Gordon Tsui Luen-on, managing director at Hantec Pacific, said that while the Dow closed lower overnight, it had a minimal impact on the local bourse.

“The market is expecting any positive information from Tencent that may prevent a bigger drop in the index,” he said.

Energy companies were the worst performers, with CNOOC falling 4.7 per cent, followed by PetroChina’s 3.6 per cent drop, and Sinopec sliding 2.3 per cent.

Hong Kong listed Apple suppliers ended lower with AAC Technologies closing down 0.6 per cent, while Fit Hon Teng declined 3.3 per cent. Tongda Group Holdings and Cowell closed the session little changed.

Overnight, the Dow Jones retreated 0.4 per cent, while the S&P 500 also closed lower, weighed down by the slump in Brent crude oil prices, which dropped below US$60 a barrel.

Tsui said investors would remain cautious for the rest of the week in the absence of a positive earnings result from Tencent or a lack of upbeat news regarding the ongoing trade conflict between the US and China.