Hong Kong Stocks Decline Second Day on Syria, PetroChina
Hong Kong stocks dropped, with the benchmark index falling a second day, amid mounting concern a possible military strike on Syria may disrupt the flow of oil. PetroChina Co. and Kunlun Energy Co. slumped after executives resigned amid an anti-corruption crackdown in China.
The Hang Seng Index slid 1.4 percent to 21,569.73 as of 9:31 a.m. in Hong Kong, the biggest decline since Aug. 20. All but two shares fell on the 50-member gauge. The Hang Seng China Enterprises Index lost 1.7 percent to 9,820.66. Shares dropped last week on expectations the U.S. will curb stimulus as soon as next month.
“Growing geopolitical risks in the Middle East and lingering uncertainty about U.S. monetary policy have combined into the perfect storm,” Matthew Sherwood, Sydney-based head of markets research at Perpetual Investments, which manages about $25 billion, said in an e-mail. “At the moment liquidity is light and markets are likely to keep heading lower.”
The Hang Seng Index (HSI) retreated 3.5 percent this year through yesterday, the second-worst performer among developed markets tracked by Bloomberg. The gauge yesterday traded at 10.47 times estimated earnings, compared with 14.8 for the Standard & Poor’s 500 Index and 13.66 on the Stoxx Europe 600 Index.
Futures on the S&P 500 rose 0.3 percent today. The gauge lost 1.6 percent in New York yesterday, the biggest drop in nine weeks, as the U.S., France and Britain laid legal groundwork for a military strike on Syria after its government allegedly turned chemical weapons on its people. The tension outweighed data showing consumer confidence unexpectedly climbed.
West Texas Intermediate crude rose, extending yesterday’s 2.9 percent advance to the highest close since Feb. 24, 2012. Libya’s National Oil Corp. said output may have dropped below 200,000 barrels a day, the lowest since the 2011 uprising that toppled Muammar Qaddafi.
The Hang Seng China Enterprises Index, also known as the H-share index, dropped 18 percent through yesterday from a Feb. 1 high on concern over China’s economy after a two-quarter slowdown in growth. The measure traded at 1.2 times book value, compared with a five-year average of 1.77.
China widened its anti-corruption crackdown to include the nation’s biggest company by market value, as PetroChina said three senior managers resigned and were under investigation by authorities.
Growing speculation the Federal Reserve will taper bond buying has weighed on equities in recent weeks. The central bank is expected to pare asset purchases in September by $10 billion to a $75 billion monthly pace, according to economists surveyed by Bloomberg on Aug. 9-13.
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