- Hang Seng Index closes at lowest level since June 2012
- Energy producers gain as crude oil rallies from below $27
Hong Kong stocks fell as HSBC Holdings Plc led declines by some of the city’s largest listed companies and mainland shares slid to the lowest level since 2009.
The Hang Seng Index lost 1.2 percent to 18,319.58, its lowest close since June 2012. HSBC was the biggest drag, capping a 8.1 percent two-day drop, amid concern over the perceived creditworthiness of European banks. Tencent Holdings Ltd., which has the largest weighting on the index, sank 1.9 percent. Hong Kong stocks have lost almost $2 trillion in market value from an April peak, data compiled by Bloomberg show, while a measure of equities around the world fell into a bear market this week.
“Global sentiment isn’t that great and with the world conditions worsening, the Hong Kong market will tag along with that downtrend," said Jackson Wong, associate director at Huarong International Securities Ltd. in Hong Kong. “We didn’t see any panic selling, but we don’t have any extremely positive catalyst to push up the stock market."
Hong Kong stocks extended their worst start to a lunar new year since 1994 as a global equity slump compounded concern that capital outflows, a slumping property market and China’s economic slowdown will hurt earnings. The Hang Seng Index has tumbled 16 percent this year, while the Hang Seng China Enterprises Index is trading at its lowest level since March 2009. Mainland markets resume trading on Monday after a week-long break.
“The market’s next focus is when mainland markets open next week and how they will perform," said Linus Yip, a Hong Kong-based strategist at First Shanghai Securities Ltd.
Figures for China’s January new yuan loans and money supply are due as early as Friday, while trade data is due Monday. China’s foreign-exchange reserves shrank to the smallest since 2012, the government said Feb. 7.
The Hang Seng China Enterprises Index declined 2 percent. HSBC slid 2.8 percent, after Thursday’s 5.4 percent tumble. Hengan International Group Co., a maker of personal-hygiene products, led declines on the Hang Seng Index, sliding 5 percent, after UBS Group AG recommended selling the shares.
Trading volume on the Hang Seng Index was 12 percent above the 30-day average, according to data compiled by Bloomberg.
Energy producers gained, with Kunlun Energy Co. climbing 2.3 percent. U.S. crude rallied as much as 5.9 percent on Friday after tumbling below $27 a barrel to its lowest settlement since May 2003. Gold producers jumped as investors sought havens. Zijin Mining Group Co. gained 7 percent and Zhaojin Mining Industry Co. advanced 4.7 percent.
Gaming companies also rose after Wynn Resorts Ltd. reported earnings in Macau. January was the Macau business’s “best month in a long time,” billionaire founder Steve Wynn said in a post-earnings conference call. Wynn Macau Ltd. jumped 3.6 percent, while Galaxy Entertainment Group Ltd. and Sands China Ltd. rose at least 2.1 percent.
The Hang Seng Index’s price-to-book ratio fell below one last month, a level unseen since the Asian financial crisis roiled regional markets and popped a domestic property bubble in 1998. All but two stocks on the 50-member gauge are down this year.