Hong Kong stocks fell for the first time in three days ahead of Chinese data due this week, with property developers leading declines and casino shares sliding.
Henderson Land Development Co., a Hong Kong builder controlled by billionaire Lee Shau-kee, fell the most in the sector. Sands China Ltd., a unit of billionaire Sheldon Adelson’s Las Vegas gaming company, dropped 1.7 percent as it declined second day after casino operators rebounded sharply last week. Tencent Holdings Ltd., Asia’s largest Internet company by market value, gained 1.7 percent, the biggest positive contributor to the Hang Seng Index.
The Hang Seng Index dropped 0.3 percent to 21,579.26 at the close in Hong Kong after rising as much as 0.2 percent. About three stocks declined for each that rose on the 50-member gauge. The Hang Seng China Enterprises Index, also known as the H-share index, slid 0.3 percent to 9,613.77.
“Investors aren’t very confident yet because they reckon the recovery in emerging economies won’t be that strong,” said Alex Wong, a Hong Kong-based director of asset management at Ample Capital Ltd. “Hong Kong won’t be too bearish or bullish in the meantime as people aren’t willing to take risks. Tencent is a safe haven because its growth story is intact.”
The Hang Seng Index entered a so-called correction last week, falling more than 10 percent from a high in December after China and U.S. factory data disappointed investors. The gauge slid 7.4 percent this year, the worst performer after Japan’s Nikkei 225 Stock Average among 24 developed markets tracked by Bloomberg. Global equity losses in 2014 peaked at $3 trillion on Feb. 4 and have since narrowed to $1.6 trillion, data compiled by Bloomberg show.
China may report as early as today that new yuan loans climbed to 1.1 trillion yuan ($181 billion) in January from 482.5 billion yuan the previous month, according to economists surveyed by Bloomberg. Data on aggregate financing and money supply are also due this week, with no fixed date for release. A report on January trade is due Feb. 12, before inflation data on Feb. 14.
China’s central bank signaled that volatility in money-market rates will persist and borrowing costs will rise, underscoring the risk of defaults that could weigh on confidence and drag down growth.
“When the valve of liquidity starts to tame and curb excessive credit expansion, money-market rates, or the cost of liquidity, will reflect that,” the People’s Bank of China said in a Feb. 8 report. “The market needs to tolerate reasonable rate changes so that rates can be effective in allocating resources and modifying the behavior of market players.”
Futures on the Standard & Poor’s 500 Index fell 0.2 percent today. The gauge climbed 1.3 percent on Feb. 7 amid optimism economic growth can weather stimulus cuts even as U.S. data showed weaker-than-expected hiring. Reports last week showed payrolls rose 113,000 in January, less than the 180,000 projected in a Bloomberg survey. The central bank last week said it will press on with a second reduction to its monthly bond buying, by $10 billion to $65 billion, citing improvement in the labor market.
Property companies slid. Henderson dropped 2.6 percent to HK$41.20 after jumping on Feb. 7 by the most since September. China Overseas Land & Investment Ltd., the biggest mainland developer listed in Hong Kong by market value, dropped 2.4 percent to HK$19.86.
Shanghai’s new home sales dropped 30 percent in January from a year earlier, property consultant Shanghai UWin Real Estate Information Services Co. said in a e-mailed statement today.
Sands China retreated 1.7 percent to HK$58.20, paring its 11 percent gain on Feb. 6. Galaxy Entertainment Group Ltd., the Macau casino operator controlled by billionaire Lui Che-woo, slipped 2.1 percent to HK$69.60.
A measure of information technology shares had the biggest gain among the Hang Seng Composite Index’s 11 industry groups. Tencent climbed 1.7 percent to HK$533.50, leading gains this year on the benchmark Hang Seng Index. Lenovo Group Ltd., the world’s largest maker of personal computers, advanced 2.4 percent to HK$8.62.
Chow Tai Fook Jewellery Group Ltd. increased 3.3 percent to HK$12.48 after reporting same-store sales growth during Chinese New Year was 15 percent from a year earlier. Chow Sang Sang Holdings International Ltd., a retailer of gold and gem-set jewelry, increased 4.9 percent to HK$22.40.
BYD Co., the automaker backed by Warren Buffett’s Berkshire Hathaway Inc., jumped 4.6 percent to HK$39.95 after China’s government said it will continue incentives for electric vehicles beyond 2015.
Great Wall Motor Co. jumped 5.5 percent to HK$35.65 after China International Capital Corp. named the maker of sports utility vehicles as one of its top picks.
Dongfeng Motor Group Co., a carmaker in negotiations to buy a stake in PSA Peugeot Citroen, rose 2.1 percent to HK$11.54 before being suspended from trading pending an announcement.