- Energy producers lead declines after PetroChina reports loss
- Shanghai Composite caps biggest monthly loss since January
Hong Kong’s stocks dropped the most among Asian markets after Chinese energy producers reported poor results and U.S. equities slumped.
The Hang Seng Index slid 1.5 percent at the close, its steepest loss in three weeks. Oil companies were the biggest drag in the city’s benchmark gauge, with PetroChina Co. sliding after posting its first quarterly loss since listing in 2000. Cnooc Ltd. dropped more than 2 percent after reporting a decline in revenue. The Shanghai Composite Index fell 0.3 percent.
While China’s economy is showing signs of stabilizing, that hasn’t filtered down to corporate earnings. Of the 180 companies listed in Shanghai that have reported three-month figures and are tracked by Bloomberg, 51 percent have missed analyst expectations. In Hong Kong, 38 percent of companies have trailed projections. In the U.S., this earnings season is predicted to be the worst since the financial crisis. The Standard & Poor’s 500 Index capped its biggest loss in three weeks on Thursday after the Bank of Japan refrained from adding more stimulus measures.
“Most expectations for an economic recovery have been priced in and corporate earnings are not doing too well,” said Dai Ming, a fund manager at Hengsheng Asset Management Co. in Shanghai. “There’s no catalyst for stocks now.”
The Hang Seng Index’s losses pared this month’s gain to 1.4 percent. The Shanghai Composite capped a 2.2 percent loss in April. The CSI 300 Index slipped 0.1 percent on Friday, while Hong Kong’s Hang Seng China Enterprises Index fell 1.3 percent. Hong Kong and China’s markets will be closed on Monday for a public holiday.
PetroChina, the nation’s biggest oil company, retreated 3.6 percent in Hong Kong. The company reported a 13.8 billion yuan ($2.1 billion) loss in the first quarter from a 6.15 billion yuan profit a year ago, because of falling oil and gas prices, it said Thursday. The shares fell 1.5 percent in Shanghai.
Cnooc dropped 2.3 percent in Hong Kong after revenue decreased 30 percent in the first three months. Aluminum Corp. of China Ltd. lost 2.6 percent after first-quarter profit dropped 60 percent from a year earlier on slumping metal prices.
China’s stocks, bonds and currency have all fallen in tandem this month for the first time in two years. The declines mark a reversal from March, when the benchmark equities gauge jumped 12 percent and the yuan rallied the most since 2010 as new credit surged. Improving data from industrial output to retail sales have led traders to pare back bets for more stimulus.
An official purchasing managers’ index probably rose to 50.3 in April from 50.2 in March, according to the median estimate in a Bloomberg survey. The data are scheduled to be released May 1. A reading above 50 indicates expansion.
— With assistance by Shidong Zhang