Hong Kong Stocks Decline on Property, Banks; Cnooc SurgesJonathan Burgos
Hong Kong stocks dropped, with the city’s benchmark index extending its longest losing streak in two months, as property and financial shares led declines.
Hang Lung Properties Ltd. fell 3 percent to lead Hong Kong developers lower. Industrial & Commercial Bank of China Ltd. slipped 1.4 percent, pacing declines among mainland lenders. Cnooc Ltd. jumped 4.9 percent after China’s biggest offshore oil producer’s earnings beat expectations.
The Hang Seng Index slid a fifth day, losing 0.7 percent to close at 21,817.73. Almost six shares fell for each that gained on the 50-member gauge. The benchmark dropped the most in seven weeks yesterday as outflows from Asia accelerated on speculation the Federal Reserve will cut bond buying next month.
“Selling pressure is continuing amid concern about the Fed’s stimulus tapering and capital outflows from emerging markets,” said Castor Pang, head of research at Core Pacific-Yamaichi International Hong Kong Ltd. “Investors are trying to reduce risks by reallocating funds back to the U.S.”
Emerging-market stocks tumbled to a six-week low yesterday after investors withdrew $8.4 billion from developing-nation exchange-traded funds this year, with weakening economies in India and Indonesia spurring pessimism.
The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong, also known as the H-share index, dropped 0.5 percent to 9,856.86. The gauge fell 19 percent from a Feb. 1 high through today and traded at 1.2 times book value, compared with a five-year average of 1.8.
Shares dropped after a report showed consumer prices in Hong Kong increased 6.9 percent in July from a year earlier. That compares with the median 4.9 percent increase estimate by 14 economists in a Bloomberg survey.
“Inflation is a concern,” Andrew Sullivan, head of sales trading at Maybank Kim Eng Holdings Ltd. in Hong Kong, said on Bloomberg television. “We’ve had all this cheap money for so long, we are bound to see bits of inflation coming through.”
The Hang Seng Index retreated 3.7 percent this year, the worst performer among developed markets tracked by Bloomberg. The gauge traded at 10.4 times estimated earnings today, compared with 15 for the Standard & Poor’s 500 Index.
Futures on the S&P 500 fell 0.2 percent today. The gauge rose 0.4 percent yesterday, snapping a four-day losing streak, as retailers’ results surpassed estimates and investors awaited signals on stimulus measures from the central bank.
The Federal Open Market Committee will release minutes of its July 30-31 meeting today, with investors seeking clues on when the central bank will pare $85 billion in monthly asset purchases. Officials will begin to curtail bond buying at their Sept. 17-18 meeting, according to 65 percent of economists surveyed by Bloomberg from Aug. 9-13. Global central bankers meet in Jackson Hole, Wyoming, on Aug. 22-24 to discuss the world economy and monetary policy.
Shares of developers, conglomerates and financials led declines on the Hang Seng Composite Index today. Energy and resources companies rebounded.
Hang Lung Properties, which gets about 42 percent of sales from China, sank 3 percent to HK$24.45. Cheung Kong Holdings Ltd., controlled by billionaire Li Ka-shing, dropped 1.6 percent to HK$109.90. Sun Hung Kai Properties Ltd., Hong Kong’s biggest homebuilder, fell 1.5 percent to HK$100.50.
Chinese lenders dropped. ICBC, as the nation’s biggest bank is known, slipped 1.4 percent to HK$5.08. China Construction Bank Corp. lost 1.4 percent to HK$5.70. Agricultural Bank of China Ltd. fell 1.2 percent to HK$3.32.
Belle International Holdings Ltd. declined 2.7 percent to HK$11.02. HSBC Holdings Plc lowered its rating on the seller of women’s footwear to underweight from neutral, saying it may report weaker first-half earnings on Aug. 23.
Among stocks that advanced, Cnooc climbed 4.9 percent to HK$15.54. The company posted a 7.9 percent increase in first-half profit from a year earlier to 34.38 billion yuan ($5.6 billion) as higher oil output offset rising costs. The result compared with the 30.25 billion yuan median estimate of eight analysts surveyed by Bloomberg.
Shimao Property Holdings Ltd., a mainland developer controlled by billionaire Hui Wing Mau, climbed 4.2 percent to HK$18.76 after first-half profit exceeded analyst estimates.
The HSI Volatility Index gained 1 percent to 19.31, the highest close since July 17, indicating traders expect the equity benchmark to swing 5.5 percent in the next 30 days.