Hong Kong's Hang Seng Declines to One-Month Low; Sinopec Falls on Earnings
Hong Kong stocks fell, dragging the Hang Seng Index to a one-month low, as a drop in China Petroleum & Chemical Corp.’s second-quarter profit fueled concerns about global economic growth.
China Petroleum & Chemical, known as Sinopec, sank 1.6 percent. HSBC Holdings Plc, Europe’s biggest bank, slipped 0.3 percent after calls by a European Central Bank official to maintain stimulus measures raised concerns about global economic growth. Cathay Pacific Airways Ltd. jumped 1.5 percent, the biggest gain on the Hang Seng Index, after its Hong Kong Dragon Airlines Ltd. unit reached an agreement with a labor union that averted industrial action.
“There is a sense of resignation and disappointment in the global economy,” said Francis Lun, general manager at Fulbright Securities Ltd. in Hong Kong. “It’s weighing down on the market.”
The Hang Seng Index lost 0.4 percent to 20,889.01 at the close, the lowest close since July 26, with about three stocks falling for every one that rose. The Hang Seng China Enterprises Index of so-called H shares of Chinese companies fell 0.9 percent to 11,670.39.
Sinopec slid 1.6 percent to HK$6.26 after saying second- quarter profit fell 10 percent to 19.68 billion yuan ($2.89 billion) from a year earlier. Margins from processing oil slumped 45 percent in the first six months as crude costs surged 84 percent, the company said.
PetroChina Co., the nation’s No. 1 oil and gas producer, fell 0.6 percent to HK$8.62 after crude oil for September delivery slid 1.3 percent in New York on Aug. 20. Cnooc Ltd., China’s biggest offshore oil producer, lost 0.6 percent to HK$13.18. Energy companies had the third-biggest drop as a group on the Hang Seng Index, according to data compiled by Bloomberg.
HSBC retreated 0.3 percent to HK$77.15. European Central Bank council member Axel Weber said in an interview on Bloomberg television that the ECB should help banks through end-of-year liquidity tensions before determining in the first quarter when to withdraw emergency lending measures.
Concern over budget deficits in Europe and speculation China’s government will further tighten money supply have dragged down the Hang Seng Index by 6.8 percent from its highest close this year on Jan. 6. Stocks on the gauge trade at an average 13.5 times estimated earnings, down from 17.2 times at the beginning of the year.
BYD Co., the Chinese automaker backed by Warren Buffett, tumbled 3.8 percent to HK$44.65 after reporting second-quarter profit that was below analysts’ expectations.
Yanzhou Coal Mining Co., China’s fourth-biggest coal producer, dropped 1.3 percent to HK$16.54. Its first-half net income also missed analyst estimates.
Among stocks that rose, Cathay Pacific jumped 1.5 percent to HK$19.74. The carrier’s Hong Kong Dragon Airlines unit on Aug. 21 reached an accord with a flight-attendants union that had threatened to stage a strike over staffing levels.
West China Cement Ltd. surged 15 percent to HK$1.94 on its first day of trading from its initial share sale price of HK$1.69. The company raised HK$1.39 billion ($179 million) in a share sale.
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