Hong Kong stocks fell, sending the Hang Seng Index to its first weekly drop in almost two months, as commodity producers declined after a stronger dollar cut material prices.
China Petroleum & Chemical Corp., known as Sinopec, sank 2.4 percent, the steepest drop on the Hang Seng Index. A blast at its refinery injured seven workers yesterday, according to a statement posted on Shanghai’s work safety administration’s website today. Jiangxi Copper Co., China’s No. 1 producer of the metal, dropped 2.7 percent. China Mobile Ltd. extended yesterday’s fall, retreating 0.7 percent, after posting third- quarter profit that missed analysts’ estimates.
The Hang Seng Index slid 0.6 percent to 23,517.54 at the close, after rising as much as 0.1 percent. The index posted its first weekly drop since the period ended Aug. 27. Group of 20 finance officials are likely to discuss global economic issues including currencies at a meeting that begins today in Gyeongju, South Korea, Bank of Japan Governor Masaaki Shirakawa said.
“Investors are keeping an eye on the G-20 meeting to see more indication on currencies,” said Ben Kwong, chief operating officer at KGI Asia Ltd. “The strengthening of the U.S. dollar is having a negative impact on resources related stocks.”
Almost three stocks fell for each that rose on the 45- member Hang Seng Index. The Hang Seng China Enterprises Index of so-called H shares of Chinese companies declined 0.9 percent to 13,494.80.
Dollar Index Rises
Sinopec declined 2.4 percent to HK$7.21. An explosion at its Gaoqiao refinery in Shanghai injured seven workers yesterday, according to a statement posted on Shanghai’s work safety administration’s website today. The fire was put out five minutes after the incident occurred.
Oil and metal prices fell as the strengthening U.S. currency curbed the investment appeal of commodities. Crude oil for December delivery dropped 2.4 percent to settle at $80.56 a barrel in New York yesterday, while the London Metal Exchange Index of six metals including aluminum and copper declined 0.4 percent.
The Dollar Index, which tracks the U.S. currency versus those of six major trading partners such as the euro, rose to 77.418 in New York yesterday. The gauge has risen 0.8 percent this week.
Jiangxi Copper, China’s No. 1 producer of the metal, dropped 2.7 percent to HK$22, while Zhaojin Mining Industry Co., a miner based in China’s Shandong province, sank 1 percent to HK$24. Aluminum Corp. of China Ltd. slid 1 percent to HK$7.85. A measure of materials companies had the biggest drop on the Hang Seng Composite Index.
The Hang Seng Index soared 15 percent between Aug. 27 and Oct. 15, when it posted the longest weekly winning streak since the period ended Nov. 2, 2007, as economic reports and corporate earnings boosted confidence in a global economic recovery. Stocks in the gauge trade at an average 15 times estimated earnings, compared with about 17.2 times at the start of the year.
Maanshan Iron & Steel Co., China’s second-biggest Hong Kong-traded steelmaker, tumbled 4.3 percent to HK$4.65 after saying profit fell 99.6 percent to 3.04 million yuan ($456,587) because demand slowed and high prices of raw materials eroded margins.
China Mobile, the world’s biggest phone carrier by market value, retreated 0.7 percent to HK$80.40. It fell 1.5 percent yesterday after posting third-quarter profit that missed analysts’ estimates.
Among stocks that rose, Swire Pacific Ltd., a Hong Kong office landlord, rose 1.8 percent to HK$112.80, the second- biggest gain on the Hang Seng Index. Citigroup Inc. analysts raised its rating to “buy” from “hold,” citing an improved outlook for the company’s investment property and marine businesses. The brokerage increased its share-price estimate to HK$132 from HK$102.40.
Futures on the Hang Seng Index fell 0.8 percent to 23,485.
To contact the editor responsible for this story: Darren Boey at firstname.lastname@example.org.