Hong Kong Stocks Decline After Kerry’s Comments on Syria

Hong Kong stocks fell amid concern tensions will escalate after U.S. Secretary of State John Kerry said the president will hold Syria accountable for using chemical weapons.

AAC Technologies Holdings Inc., a maker of acoustic components that gets more than half of its revenue from the U.S., dropped 2.1 percent. China Southern Airlines Co. dropped 3.8 percent after missing earnings estimates. Want Want China Holdings Ltd. surged 9.6 percent after the snackmaker’s first-half profit beat expectations.

The Hang Seng Index slid 0.6 percent to 21,874.77 at the close in Hong Kong, its biggest drop in a week. About four shares fell for each that rose on the 50-member gauge. The equity benchmark posted a 2.9 percent decline last week, the most since the period ended June 21, as outflows from Asia accelerated on expectations the Federal Reserve will cut stimulus.

“Geopolitical risk is a concern but the biggest concern is still Fed tapering,” said Christian Kielland, managing director of brokerage BTIG Hong Kong Ltd. “Investors are likely to remain cautious until the Fed meeting in September. There’s a certain element of skepticism on Chinese data.”

An official report today showed China’s industrial profits in July rose 11.6 percent from a year earlier, up from a 6.3 percent gain in June. The government will suspend the release of industry-specific data from the purchasing managers’ index for manufacturing due Sept. 1 because of accuracy concerns, the National Bureau of Statistics said yesterday.

The Hang Seng Index retreated 3.5 percent this year, the second-worst performer among developed markets tracked by Bloomberg. The gauge traded at 10.5 times estimated earnings, compared with 15 for the Standard & Poor’s 500 Index.

Syria Conflict

Futures on the S&P 500 slumped 0.5 percent today. The gauge fell 0.4 percent in New York yesterday after Kerry said President Barack Obama called the Syrian government’s use of chemical weapons against its people a “moral obscenity.” Shares rose earlier as investors weighed how a drop in U.S. durable goods orders might affect expected stimulus cuts.

Fed chief Ben S. Bernanke in May said the central bank “could take a step down” in its record asset purchases depending on the strength of the U.S. economic recovery. The first stage may be to pare bond buying in September by $10 billion to a $75 billion monthly pace, according to economists surveyed by Bloomberg on Aug. 9-13.

AAC Technologies slid 2.1 percent to HK$34.55. Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., retreated 0.8 percent to HK$11.82.

China Shares

The Hang Seng China Enterprises Index, also known as the H-share index, fell 0.9 percent to 9,988.23 today. The gauge dropped 18 percent from a Feb. 1 high on concern China’s growth is slowing and that the U.S. will taper the flow of stimulus. The measure traded at 1.2 times book value, compared with a five-year average of 1.77.

China Southern Airlines dropped 3.8 percent to HK$2.81. The carrier’s first-half profit fell 19 percent to 344 million yuan from a year earlier, the worst result in three years. Analysts in a Bloomberg survey had expected net income of 516 million yuan.

Belle International Holdings Ltd., a retailer of woman’s footwear, retreated 3.1 percent to HK$10.66. Its shares yesterday jumped the most since July 4 after reporting first-half earnings.

Hisense Kelon Electrical Holdings Co., which sells refrigerators, was suspended from trading in the afternoon pending a statement on development of “significant” litigation, according to a statement to the city’s bourse.

Want Want

Among stocks that climbed, Want Want surged 9.6 percent to HK$11.42, leading gains on the Hang Seng Index. First-half profit climbed 33 percent from a year earlier to $307.6 million, topping estimates for a $286.8 million gain.

Evergrande Real Estate Group Ltd. gained 3 percent to HK$3.40. China’s biggest developer by sales volume reported first-half underlying profit climbed 23 percent as the company sold the most property by area among Chinese developers in the period, according to China Real Estate Information Corp.

The HSI Volatility Index gained 4.8 percent to 19.41, indicating traders expect the equity benchmark to swing 5.6 percent in the next 30 days.

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