Most Hong Kong stocks fell amid disappointing Chinese economic data as Want Want China Holdings Ltd. retreated from a record high. Shares climbed earlier after a U.S. jobs report beat estimates.
Want Want China, which gets half its revenue from dairy products and beverages, slid 4.3 percent. China Yurun Food Group Ltd., the country’s second-largest meat supplier, slumped 7 percent after issuing a profit warning. Li & Fung Ltd., a supplier to Wal-Mart Stores Inc., gained 1.6 percent. BOC Hong Kong Holdings Ltd., the city’s sole yuan clearing bank, increased 1.9 percent after Morgan Stanley raised its rating on the stock.
About five stocks declined for every two that gained on the Hang Seng Composite Index, the city’s broadest equity measure. The Hang Seng Index closed little changed at 23,090.82 after gaining as much as 0.7 percent, with trading volume 27 percent below the 30-day average. The Hang Seng China Enterprises Index of mainland companies declined 0.4 percent to 11,435.82.
“The Hong Kong stock market is dependent primarily on the growth outlook for China and the U.S., and U.S. monetary policy,” said Michael Kurtz, Hong Kong-based head of global equity strategy at Nomura Holdings Inc. “It’s only the China factor of those three that’s become a little bit more uncertain. We don’t see China rolling over hard. China’s losing a little bit on the growth side in order to gain a little bit more on the structural side.”
China Production, Retail
The Hang Seng Index pared this year’s gains to 1.9 percent through March 8 as developers sank after governments in Beijing and Hong Kong ordered that more be done to curb property prices. The measure traded at 11.2 times average estimated earnings on March 8, compared with 14 for the Standard & Poor’s 500 Index and 12.7 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
China’s industrial production increased 9.9 percent in the first two months and retail sales rose 12.3 percent, government data showed March 9, trailing economists’ estimates of 10.6 percent and 15 percent growth respectively.
Belle International Holdings Ltd., the mainland’s largest footwear retailer, sank 1.1 percent to HK$15.02, while New World Department Store China dropped 1.4 percent to HK$4.95. Great Wall Motor Co., a Chinese maker of sport utility vehicles and pickup trucks, slid 1.5 percent to HK$30.65.
Want Want China, which closed last week at a record high after reporting better-than-estimated earnings, slumped 4.3 percent to HK$11.58, the biggest drop in the Hang Seng Index. Higher milk powder costs may cut into the company’s margins, UBS AG said.
China Yurun Tumbles
China Yurun tumbled 7 percent to HK$5.20 after saying it expects a “substantial decrease and loss” when it reports earnings for the year ended Dec. 31. The company blamed “macroeconomic uncertainties,” it said in a filing.
China Life Insurance Co., the nation’s biggest insurer, was suspended from trading in Hong Kong and Shanghai today, pending release of a clarification announcement in relation to certain press reports.
Futures on the S&P 500 slid 0.2 percent today. The measure climbed 0.5 percent on March 8 as data showed employers added more jobs than forecast last month and the unemployment rate unexpectedly dropped. U.S. employment rose 236,000 last month, Labor Department figures showed, exceeding the median forecast of 165,000 by 90 economists surveyed by Bloomberg. The jobless rate dropped to 7.7 percent from 7.9 percent.
Li & Fung rose 1.6 percent to HK$11.16, while Techtronic Industries Co., a power-tool maker that counts the U.S. as its biggest market, gained 1.9 percent to HK$17.22.
BOC Hong Kong rose 1.9 percent to HK$26.90 after Morgan Stanley raised its rating to overweight from equal-weight on prospects the company will benefit from growth in loans and deposits in Hong Kong. The company’s dividend yield is also attractive, analyst Anil Agarwal wrote in a report today.
Hang Seng Index futures declined 0.2 percent to 23,056. The HSI Volatility Index rose 0.5 percent to 14.68, indicating traders expect a swing of 4.2 percent for the equity benchmark in the next 30 days.