Chinese Stocks in Hong Kong Fall to One-Month Low on Oil Shares

  • Shanghai dual-listed shares lag offshore drop, widen premium
  • Bumpy Chinese economic recovery a risk to commodities: analyst

Chinese stocks in Hong Kong fell to a one-month low as commodity prices declined and doubts grew over the sustainability of a pickup in the nation’s economic indicators.

The Hang Seng China Enterprises Index lost 0.6 percent, dropping for a third day. The Shanghai Composite slipped less than 0.1 percent, helping widen the premium mainland shares command over dual-listed counterparts in Hong Kong. China Petroleum & Chemical Corp. and PetroChina Co. paced losses for energy companies in Hong Kong as U.S. crude prices traded below $44 a barrel. Zijin Mining Group Co. sank the most in three weeks as gold prices retreated.

The Hang Seng China gauge has fallen 6 percent from an April 21 high. Prices are reversing in the nation’s commodities futures as exchanges took steps to cool speculative activity, while a private gauge of Chinese manufacturing declined more than expected in April, data released by Caixin Media and Markit Economics showed Tuesday.

“The recovery in commodity prices is not sustainable when China’s economic recovery is bumpy,”’ said Ronald Wan, chief executive at Partners Capital International in Hong Kong. “There’s a lot of pessimism on Hong Kong stocks as index heavyweights retreat after the disappointing PMI data yesterday. The gap with mainland shares may widen further.”

Trading volumes on the Shanghai Composite index have halved from this year’s peak in March amid a jump in raw materials trading. Data from industrial output to retail sales and credit growth all beat expectations in March.

The Hang Seng China gauge declined to 8,697.37 in Hong Kong. The Shanghai Composite Index closed at 2,991.27 while the CSI 300 Index fell 0.1 percent. The Hang Seng China AH Premium index climbed for a third day as mainland shares outperformed their peers in Hong Kong.

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