Hong Kong stocks close lower as investors cast wary eye on Fed, Dutch election

Hang Seng Index finishes down 35.1 points at 23,792.85. Energy plays were among top losers, after international oil prices hit three-month low overnight

PUBLISHED : Wednesday, 15 March, 2017, 9:30am
UPDATED : Wednesday, 15 March, 2017, 10:55pm

Hong Kong stocks struggled to keep their heads above water on Wednesday, nudging lower at close, as investors kept an wary eye on the upcoming interest rate decision by the US Federal Reserve and the result of the Dutch election.

The Hang Seng Index finished down 0.2 per cent or 35.1 points at 23,792.85. The Hang Seng China Enterprises Index, or the H-shares index, retreated 0.4 per cent or 42.4 points to 10,272.83.

Around HK$73 billion worth of shares changed hands in Hong Kong markets, compared with Tuesday’s HK$72 billion.

“Caution prevails, as there are too many uncertainties in both Chinese and overseas financial markets.” said Han Yanbin, an analyst for Caida Securities.

The Federal Reserve will unveil its monetary policy decision Thursday morning Hong Kong time and is widely expected to deliver a 25-basis-point rate increase and offer a new rate forecast for this year.

“Many investors are sitting on the sidelines, as they don’t want to make big bets before they get clearer views about the US rate outlook this year,” he added.

Caution prevails, as there are too many uncertainties in both Chinese and overseas financial markets
Han Yanbin, analyst for Caida Securities

The European political sentiment also grabbed global investors’ attention, as the Dutch began voting on Wednesday to elect their next prime minister. The Bank of Japan and the Bank of England are also set to hold policy meetings on Thursday.

Energy plays were among the top losers, after international oil prices hit a three-month low overnight.

Offshore oil producer CNOOC declined 1.1 per cent to HK$8.81, refining giant Sinopec lost 0.7 per cent to HK$5.81, and PetroChina shed 0.5 per cent to HK$5.66.

Cathay Pacific Airways fell 1.4 per cent to HK$11.44, after the Hong Kong-based carrier reported its first annual loss since 2008, mainly due to increased competition from rival carriers in mainland China, falling demand for premium class seats, and a strong Hong Kong dollar.

However, mainland Chinese airlines advanced.

China Southern Airlines jumped 4.8 per cent to HK$5.22, after it reported a 6.8 per cent on-year increase in passenger numbers for February. China Eastern Airlines also gained 6.5 per cent to HK$4.6, and Air China added 3.2 per cent to HK$6.22.

Hong Kong Exchanges & Clearing also rose 1.4 per cent to HK$194.7, after Chinese Premier Li Keqiang said at a news conference that China will allow overseas investors to buy onshore bonds in Hong Kong this year.

On the mainland, stocks opened lower but then reversed losses after Premier Li reassured investors at a news conference that there is no risk of a hard landing for the Chinese economy.

The Shanghai Composite closed up 0.1 per cent or 2.43 points at 3,241.76. The large-cap CSI 300 Index ended 0.2 per cent higher at 3,463.64.

The Shenzhen Component Index also added 0.1 per cent to 10,543.01, and the startup index ChiNext closed flat at 2,026.76.

Cement producers advanced for a second day in a row after official data showed fixed-asset investment accelerated in the first two months of the year. Huaxin Cement soared 10 per cent to 10.79 yuan, and Jiangxi Wannianqing Cement jumped 5.5 per cent to 9.59 yuan.