Hong Kong Stocks Retreat to Cap Longest Losing Streak Since 1984by
Hong Kong stocks fell, driving the benchmark index to its longest losing streak in three decades.
The Hang Seng Index slid 0.2 percent to 21,274.37 at the close, capping a 5.4 percent nine-day drop. The stretch of losses was the longest since July 1984, when Britain was in the middle of negotiating the city’s handover to China. Belle International Holdings Ltd. has led declines since Dec. 2 after the footwear retailer reported a sales slump, while oil stocks fell with crude.
“The overall investor environment remains relatively difficult in lieu of many uncertainties, like the U.S. interest-rate move and the continuing decline of commodity prices," said Ben Kwong, a director at brokerage KGI Asia Ltd. “China also affects Hong Kong so it seems to be a battle on all fronts. There aren’t many positive factors that can move up the market. Hong Kong is technically oversold so we are seeing some recovery today but I’m skeptical as to whether it is sustainable."
The Hang Seng gauge’s relative strength index fell to 31.4 on Tuesday, approaching the 30 level that some traders consider as oversold. The index trades at 9.3 times reported earnings, below its 10-year average of 12.7 and 47 percent below the MSCI All-Country World Index’s ratio.
Cnooc Ltd., PetroChina Co. and China Petroleum & Chemical Corp. are down at least 11 percent since Dec. 2 after West Texas Intermediate crude slumped to the lowest in nearly seven years. Belle tumbled 23 percent after saying last week that its third-quarter footwear same-store sales dropped more than 10 percent.
The Hang Seng Index is on track for a 9.9 percent annual decline, while the Hang Seng China Enterprises Index of mainland companies has dropped 22 percent.