Hong Kong Stocks Decline Ahead of U.S. Employment DataKana Nishizawa
Hong Kong stocks slid, with the benchmark index falling from a four-week high, as investors awaited U.S. jobs data to gauge when the Federal Reserve will trim stimulus. China Mobile Ltd. plunged after posting its largest drop in profit since 1999.
China Mobile lost 3.4 percent and was the most actively traded stock on the Hang Seng Index. Sands China Ltd., a unit of billionaire Sheldon Adelson’s Las Vegas gaming company, led casino shares lower after closing yesterday at a record high. Huaneng Power International Co., the unit of China’s largest electricity producer, jumped 5.7 percent after the sector was recommended at UBS AG.
The Hang Seng Index lost 0.5 percent to 23,315.99 at the close in Hong Kong. Two shares dropped for each that gained amid trading volume 29 percent lower than the 30-day average. The Hang Seng China Enterprises Index, also known as the H-share index, slipped 0.1 percent to 10,653.43.
“After a couple of days of rebounds, investors are taking some profit and waiting for economic data from the U.S. to see what the Fed’s move will be,” said Cedric Ma, a Hong Kong-based senior investment strategist at Convoy Asset Management Ltd. “The market is expecting delayed tapering but they still need to see the data first. If the macro news flow is quiet, people will look at individual company news.”
Futures on the Standard & Poor’s 500 Index were little changed. The equity gauge rose less than 0.1 percent yesterday to extend a record high as investors watched earnings before today’s employment report.
The Labor Department will release September jobs data, which was pushed back from Oct. 4 because of the 16-day partial federal shutdown. The report is expected show employers added the most workers since April, according to the median estimate of 93 economists surveyed by Bloomberg. Fed policy makers will probably hold off on paring record bond purchases until March after the shutdown slowed fourth-quarter growth and delayed economic data needed to assess the strength of the recovery, according a Bloomberg survey last week.
The Hang Seng Index climbed 18 percent from this year’s low in June as data showed China’s economic expansion is stabilizing after a two-quarter slowdown. Hong Kong’s equity benchmark traded at 11.1 times estimated earnings, compared with 15.8 for the S&P 500 yesterday.
China can meet major economic goals this year and the economy is stabilizing and improving, Premier Li Keqiang said yesterday at a meeting organized by the All China Federation of Trade Unions, China Central Television reported. Economic growth and consumer prices are in “reasonable ranges,” and domestic demand has huge potential, the report cited Li as saying. The nation’s official target is for 7.5 percent growth this year.
China Mobile lost 3.4 percent to HK$82.15. The world’s largest phone company’s profit plunged as costs to build its new network rose and users switched to third-party messaging apps. Net income fell 8.8 percent to 28.4 billion yuan ($4.7 billion) in the third quarter, missing the 31.1 billion-yuan expected by analysts surveyed by Bloomberg.
China Wireless Technologies Ltd., a smartphone vendor that counts China Mobile as its biggest customer, tumbled 6.8 percent to HK$2.89.
Casino shares dropped after advancing two days on a surge in third-quarter profit at Sands China, with its shares today falling 4.9 percent to HK$56.80. Galaxy Entertainment Group Ltd., controlled by billionaire Lui Che-woo, slid 4.5 percent to HK$59.75. SJM Holdings Ltd., Asia’s biggest casino operator, slumped 6.6 percent to HK$25.60.
China utilities advanced after UBS said a cut next year in wholesale electricity prices that distributors pay may remove uncertainty and could be catalyst for independent power producer shares. Huaneng Power rose 5.7 percent to HK$8.74. China Resources Power Holdings Co. gained 3.9 percent to HK$20.75.
Futures on the Hang Seng Index fell 0.4 percent to 23,308. The Hang Seng Volatility Index rose 0.4 percent to 14.99, indicating traders expect the benchmark equity index to swing 4.3 percent in the next 30 days.