Hong Kong Stocks Drop on China Coal Earnings, Japanese Reactor
Hong Kong stocks fell, driving the benchmark Hang Seng Index lower for the first time in four days, as China Coal Energy Co.’s earnings missed analyst estimates and engineers struggled to get power to a crippled Japanese reactor.
China Coal, the nation’s No. 2 producer of the fuel, lost 7.6 percent. Maanshan Iron & Steel Co., China’s second-biggest Hong Kong-traded steelmaker, declined 2.6 percent after saying second-half earnings slumped 95 percent. Foxconn International Holdings Ltd. (2038) dropped 2 percent on renewed concern damage from the March 11 earthquake in Japan will disrupt supplies.
The Hang Seng Index fell 0.3 percent to 22,791.52 as of 2:11 p.m. in Hong Kong, with more five shares declining for every three that advanced among the index’s 45 companies. The gauge slumped 4.1 percent last week, the biggest weekly drop since February, amid concern Japan’s strongest earthquake and damage to a nuclear plant would cripple the world’s third- biggest economy.
“Investors are still cautious,” said Karson Chu, a sales trader at Citic Securities Co. in Hong Kong. “We’ve got a lot of headline risks. We’ve got another earthquake in Japan this morning and oil prices are continuing to go up.”
The Hang Seng China Enterprises Index of H shares of Chinese companies lost 0.4 percent to 12,737.44.
Oil rose to a two-week high in New York amid concern that increased allied attacks in Libya will prolong supply disruptions and that the escalating turmoil in the Middle East may curtail shipments.
Crude oil for May delivery rose as high as $105.38 a barrel in electronic trading on the New York Mercantile Exchange. That was the highest intraday price for futures since March 9. It was at $104.70 at 1:45 p.m. Hong Kong time. The April contract, which expired yesterday, gained $1.67, or 1.6 percent, to $104.
China Coal slumped 7.6 percent to HK$10.92. The company said full-year net income increased 1 percent to 7.47 billion yuan ($1.1 billion). That missed the average estimate of 10 billion yuan by 17 analysts in a Bloomberg survey.
Maanshan Iron & Steel declined 2.6 percent to HK$4.14. The company reported second-half net income tumbled 95 percent to 60 million yuan because of higher costs and slowing demand from builders and automakers.
Engineers at the Fukushima Dai-Ichi nuclear plant in northern Japan are unable to connect power to one of four damaged reactors, marring progress to cool the fuel rods, Hidehiko Nishiyama, a spokesman for the Japan Nuclear and Industrial Safety Agency, said today.
Economic damage from the magnitude-9 earthquake and tsunami that struck northeastern Japan on March 11 may last longer than after the Kobe temblor in 1995, Bank of Japan board member Ryuzo Miyao said.
Foxconn, China Life
Foxconn slipped 2 percent to HK$4.94. Makers of mobile- phone handsets and personal computers will be affected by supply disruptions in Japan, a major provider of components that are used in the electronics industry, Daiwa Securities Group Inc. said last week.
China Life Insurance Co., the nation’s biggest insurer, slid 2.4 percent to HK$28.50. Credit Suisse Group AG cut its rating on the stock to “underperform” from “neutral.” The company yesterday reported full-year net income rose 2.3 percent to 33.6 billion yuan, in line with analyst estimates.
China Dongxiang Group Co., owner of rights to the Kappa sportswear brand in China, tumbled 9.6 percent to HK$2.54, the worst performer in the Hang Seng Composite Index. HSBC Holdings Plc lowered its on the stock rating to “underweight” from “neutral.”
Futures on the Hang Seng Index (HSI) decreased 0.3 percent to 22,755.
To contact the editor responsible for this story: Nick Gentle at firstname.lastname@example.org.