Hong Kong stocks fell, with the benchmark index snapping the longest winning streak in three weeks, amid increased odds of a U.S. military strike on Syria. China Construction Bank Corp. dropped after Bank of America Corp. sold its stake in the mainland’s second-biggest lender.
China Construction Bank slumped 1.4 percent as trading of the shares boosted volume on the Hang Seng Index to the highest since June 25. Xinyi Glass Holdings Ltd. tumbled 5.9 percent on the automotive-glass maker’s plan to sell shares. Zhaojin Mining Industry Co., the mainland’s No. 2 gold producer, led materials companies higher as prices for the metal rose yesterday as Middle East turmoil drove demand for haven assets.
The Hang Seng Index (HSI) dropped 0.3 percent to 22,326.22 at the close in Hong Kong, after rising as much as 0.2 percent. Volume was more than double the 30-day average, according to data compiled by Bloomberg. More than three stocks declined for every two that climbed on the 50-member gauge. The Hang Seng China Enterprises Index slid 0.2 percent to 10,233.03.
“Syria’s situation is not long-term but volatility may rise,” said Cedric Ma, a Hong Kong-based senior investment strategist at Convoy Asset Management Ltd., which oversees about $260 million. “The market had a nice run the last couple of days and this gives investors an excuse to lock in profits.”
The Hang Seng Index pared this year’s loss to 1.5 percent as factory output data from around the world this week added to signs of global economic recovery. The gauge is the second-worst performer this year among developed markets tracked by Bloomberg, and traded at 10.7 times estimated earnings, compared with 14.8 for the Standard & Poor’s 500 Index.
China Construction Bank slid 1.4 percent to HK$5.85 after Bank of America agreed to sell its 2 billion-share stake in the lender for $1.5 billion. Goldman Sachs Group Inc., HSBC Holdings Plc and Citigroup Inc. earlier sold shares in Chinese financial institutions after new international rules made it more expensive to hold minority stakes in banks.
Xinyi Glass slumped 5.9 percent to HK$6.65 to lead declines on the Hang Seng Composite Index. The company said it plans to raise HK$793 million ($102 million) by selling shares to fund capital expenditure.
Want Want China Holdings Ltd. (151) fell 2.1 percent to HK$11.20 after Uni-President China Holdings Ltd. sold 42.3 million of the snackmaker’s shares at HK$11 each.
Futures on the S&P 500 slid 0.1 percent today. The measure climbed 0.4 percent yesterday in New York as economic data outweighed heightened concern over Syria. Data showed the Institute for Supply Management’s U.S. manufacturing index last month increased to its strongest since June 2011, exceeding economists’ estimates.
President Barack Obama won endorsement from top Republican lawmakers to help makes his case that the Syrian government was behind an alleged sarin gas attack against civilians last month. Separately, the Senate Foreign Relations Committee agreed on a draft resolution authorizing force that would set a 90-day limit on U.S. military action.
A measure of materials companies had the biggest gain among the Hang Seng Composite Index’s 11 industry groups. Zhaojin Mining jumped 5.5 percent to HK$7.50, while Zijin Mining Group Co. (2899), China’s No. 1 gold miner, rose 1 percent to HK$1.98. Gold yesterday traded above $1,400 an ounce, rising the most in a week. The precious metal in August capped its first back-to-back monthly gain in a year.
The Hang Seng China Enterprises Index (HSCEI), also known as the H-share index, dropped 16 percent from a Feb. 1 high after mainland economic growth slowed for two quarters. The measure traded at 1.23 times book value, compared with a five-year average of 1.77.
Chinese President Xi Jinping said yesterday slower growth was a choice that would allow adjustments to the nation’s economic structure, which have so far included curbing excess lending and capacity. Data this week showed manufacturing strengthened, adding to signs China will meet its 7.5 percent growth target.
Goldman Sachs yesterday raised its 2013 GDP forecast for China to 7.6 percent expansion from 7.4 percent, joining Credit Suisse Group AG, Deutsche Bank AG and JPMorgan Chase & Co. in lifting projections.
Television-maker TCL Multimedia Technology Holdings Ltd. (1070) surged 9.6 percent to HK$4.10, the steepest gain on the Hang Seng Composite Index. Baidu Inc.’s and TCL’s 48-inch TV capable of playing online videos will go on sale online today at 4,567 yuan ($746), the companies said in a joint statement ahead of a news conference in Beijing yesterday.
Hang Seng Index futures declined 0.1 percent to 22,302. The HSI Volatility Index gained 4.8 percent to 18.91, indicating traders expect a swing of 5.4 percent on the benchmark equity gauge over the next 30 days.
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