Hong Kong stock market finishes lower as tech firms, chip makers retreat

Banks and oil firms also among Friday’s losers; mainland China stock indices fall

PUBLISHED : Friday, 20 April, 2018, 9:14am
UPDATED : Friday, 20 April, 2018, 10:12pm

Hong Kong stocks finished lower on Friday, capping a weekly decline, as chip makers sank on concerns about a slowdown in the industry after Taiwan Semiconductor Manufacturing Co (TSMC) forecast quarterly margins and revenues that trailed estimates.

The Hang Seng Index slid 0.9 per cent, or 290.11 points, to 30,418.33, ending the week 1.3 per cent lower. The Hang Seng China Enterprises Index, known as the H-share gauge, was down by 1.5 per cent. The mainland’s Shanghai Composite Index also fell, capping its biggest weekly decline in almost a month.

A warning from TSMC, the world’s largest contract chip maker, about soft demand for smartphones and about the possibility of slower global growth in the semiconductor industry this year had sparked a tumble in chip stocks in the US on Thursday, and investors took the cue to sell locally listed chip firms.

“TSMC has a significant place in the semiconductor industry and once it gives negative earnings guidelines, the ripples will be felt throughout the markets around the world,” said Ken Chen, a strategist at KGI Securities in Shanghai.

Hua Hong Semiconductor slumped 2.6 per cent to HK$18.66 and Semiconductor Manufacturing International Corp fell 0.8 per cent to HK$10.64. Both stocks surged a day earlier after China’s official People’s Daily newspaper ran an article calling for the backing of the domestic chip industry.

Among tech firms, internet giant Tencent Holdings fell 1.4 per cent to HK$400.20 and Sunny Optical Technology lost 5.6 per cent to HK$142.50. AAC Technology slumped 7.3 per cent to HK$121.30, making it the biggest decliner on the Hang Seng Index.

Elsewhere, bad-debt disposal company China Huarong Asset Management tumbled 12 per cent to HK$2.80 when it restarted trading following a two-day suspension after China’s anticorruption watchdog put its chairman, Lai Xiaomin, under investigation.

Among other losers, China Construction Bank dropped 1.5 per cent to HK$8.06 and Industrial & Commercial Bank of China shed 1.7 per cent to HK$6.77.

Oil stocks also slipped, with China Petroleum & Chemical Corp down 2.6 per cent at HK$7.50 and CNOOC 2.4 per cent lower at HK$12.92.

Online broker FXTM said in a report that WTI crude-oil futures risked falling from a technical standpoint if they were unable to hold above US$68 per barrel. WTI crude dropped as much as 0.5 per cent to US$67.97 a barrel on Friday.

Mainland China stocks also had a bad day, the Shanghai Composite Index sliding 1.5 per cent, or 45.83 points, to 3,071.54, finishing the week 2.8 per cent lower. The CSI 300 Index, which tracks large caps listed in Shanghai and Shenzhen, lost 1.3 per cent and the Nasdaq-style ChiNext gauge slumped 2.1 per cent

Brokerages led the sell-off across the broader market amid fears that equity declines will diminish trading interest. Dongxing Securities tumbled 6.1 per cent to 13.55 yuan and Sinolink Securities slid 5.9 per cent to 8.29 yuan. Caitong Securities lost 4.6 per cent to 13.89 yuan.