Hong Kong stocks buoyed by Tencent, but Hang Seng ends lower on a weekly basis

Hong Kong stocks closed moderately higher on Friday in a session dominated by news that Chinese officials will resume new game approvals, lifting tech giant Tencent Holdings, even as the index ended lower for the week.

The Hang Seng Index rose 129.89 points during the session, advancing 0.5 per cent, to 25,753.42. The index reversed from a deficit of more than 300 points in the morning session, although only 20 constituent Hang Seng stocks gained, while 30 ended in negative territory. For the week, the Hang Seng was down 1.3 per cent.

The mood was more negative on the Chinese mainland, as the Shanghai Composite Index eased by 0.79 per cent, or 20.02 points, to close at 2,516.25.

Tencent Holdings rallied 4.5 per cent to close at HK$315.2, lifted by news that Chinese regulators have resumed approving games, indicating a potential end to a long time overhang weighing on the gaming industry. Chinese officials suspended approvals in March amid mounting criticism of the negative impact of video games on Chinese youth.

“Some of the blue chips in the Hang Seng Index such as Tencent had been oversold. The news Friday provided a good excuse for investors to do some bargain hunting,” said Ben Kwong Man-bun, a director at KGI.

Hong Kong stocks have dropped almost 14 per cent year to date. Among the overhangs to the outlook, traders cited concerns over the direction of US stock indexes and the potential for further deterioration. The S&P 500 tumbled to a 16-month low on Thursday, and has lost about 15 per cent since October.

Total turnover of Hong Kong’s main board stood at HK$91 billion (US$11.62 billion), the highest in two weeks. Tencent had the highest turnover of any single share on Friday with HK$13 billion worth of shares changing hands.

In other action, Hong Kong bank stocks rebounded, with HSBC rising 1.57 per cent to HK$64.55 and China Construction Bank rising 0.32 per cent to HK$6.36. Banking shares ended generally weaker on Thursday after the US Federal Reserve lifted interest rates for the fourth time this year and forecast another two rate hikes for 2019, disappointing investors who had hoped for a more accommodative stance.

Hengan International Group jumped 6 per cent, lifting the personal hygiene products maker into the top three gaining H-shares during the session.

Mainland insurance giant Ping An ended weaker for the session, falling 1.12 per cent to HK$70.5 in Hong Kong, and 1.12 per cent to close at 58.34 yuan in Shanghai.

In other trading in Shanghai, the Industrial and Commercial Bank of China fell 0.76 per cent to 5.19 yuan and China Merchants Bank dropped 2.01 per cent to 25.39 yuan.

China’s banking regulators instructed banks to exercise “moderate control” of profit growth and not to “let the figures shoot too high” for 2018, according to Securities Times, a newspaper run by People’s Daily, on Thursday.

The Shenzhen Component Index fell 1.2 per cent, or 88.84 points, to 7,337.6; with turnover as 134.9 billion yuan.

Hong Kong’s stock exchange will be open during the morning session Monday and resume trading on Thursday following the Christmas break. Stock markets in Shanghai and Shenzhen will be open as normal throughout the week.