Hong Kong stocks declined as concern remained shares have risen too far, too fast, reversing gains ahead of economic data tomorrow that may show China’s economic growth accelerated the first time in eight quarters.
Brightoil Petroleum Holdings Ltd., a supplier of marine fuel, slumped 11 percent after saying it’s seeking waivers from lenders to prevent a possible default. Evergrande Real Estate Group Ltd., China’s biggest developer by sales volume, lost 7.1 percent after announcing a share offering. Sun Hung Kai Properties Ltd. gained 0.8 percent after the real estate developer’s rating was raised at two brokerages. HSBC Holdings Plc rose 1 percent to its highest level in 20 months.
The Hang Seng Index fell less than 0.1 percent to 23,339.76 at the close of trading in Hong Kong, reversing gains of as much as 0.6 percent. The Hang Seng China Enterprises Index of mainland companies fell 0.4 percent to 11,858.21.
“The market is in a consolidation period and we need better news from China for it to rise,” said Steven Leung, a Hong Kong-based institutional sales director at UOB Kay Hian Ltd. “Until investors see the Chinese economic numbers tomorrow, they may still be cautious. We may see some choppy moves until then.”
Hong Kong’s benchmark index surged 23 percent last year as China’s economy showed signs of improvement and as central banks around the globe added stimulus. Shares on the measure traded at 11.4 times estimated earnings yesterday, compared with 13.3 for the Standard & Poor’s 500 Index and 12 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
China’s National Bureau of Statistics is expected to report tomorrow that gross domestic product expanded 7.8 percent in the fourth quarter from a year earlier, according to the median estimate of 53 economists surveyed by Bloomberg News. That’s up from a three-year low of 7.4 percent in the previous period.
Sun Hung Kai gained 0.8 percent to HK$126, its highest level since April 2011. The developer was raised to buy at DBS Vickers, and to outperform at Standard Chartered Plc.
Banks also rose, led by HSBC’s 1 percent gain to HK$84.95, its highest level since April 2011 and the biggest support to the Hang Seng Index.
Among stocks that fell, Brightoil Petroleum lost 11 percent to HK$1.50, its biggest drop since Sept. 26. The supplier of marine fuel has breached the interest coverage ratio covenant on at least one of its loans, the company said. A default may trigger other loan defaults, it said.
Evergrande lost 7.1 percent to HK$4.32, its biggest decline since Aug. 15. The company is seeking to place a billion shares at HK$4.35 each, it said in a statement to the Hong Kong Stock Exchange.
The Hang Seng Index fell the last two days after reaching its highest level in 18-months on Jan. 14. The Hang Seng Volatility Index rose 0.3 percent to 14.84, indicating options traders expect a swing of 4.3 percent in the next 30 days. Futures on the Hang Seng Index fell 0.1 percent to 23,346. Volume on the measure was 17 percent below its 30-day average.