Hong Kong Shares Fall as Market Reopens to U.S. Policy Concerns

  • Global stocks retreated during Lunar New Year holiday on Trump
  • Sands China, Galaxy drop as Macau revenue misses estimates

Hong Kong stocks fell as markets opened after a holiday, catching up with equity losses worldwide amid increasing concerns over U.S. President Donald Trump’s policies.

The Hang Seng Index dropped 0.2 percent to 23,318.39 on Wednesday after markets were closed for 2 1/2 days through Tuesday for Lunar New Year. China’s markets are shut through Thursday. The MSCI World Index fell 0.6 percent over the last two days as Trump enacted limits on immigration from some nations, stoking fears he will follow through with isolationist policies touted during his campaign. These concerns overshadowed earlier optimism his support for higher fiscal spending will boost U.S. growth, which had fueled a global stock rally that lifted Hong Kong shares to a three-month high.

"U.S. stocks fell during the holidays, so this pullback is normal," said Castor Pang, head of research at Core-Pacific Yamaichi HK. "There won’t be a continued decline. I think a drop is an opportunity to buy."

Southbound inflows through an exchange link with Shanghai will support Hong Kong shares when Chinese markets reopen, and the city is less affected by U.S. policies, Pang added. Hong Kong received 18.2 billion yuan ($2.64 billion) of inflows from the mainland last month as Chinese investors took advantage of bourse links to diversify portfolios and buy the city’s cheaper shares.

Macau’s gross gaming revenue rose 3.1 percent in January, compared with the median estimate of an 8.5 percent gain in a Bloomberg survey and an 8 percent increase in December, data showed Wednesday. Sands China Ltd. fell 2.2 percent, while Galaxy Entertainment Group Ltd. declined 2.7 percent.

Developer shares bucked the overall downtrend, with Hang Lung Properties Ltd. climbing 1.8 percent. New home sales in Hong Kong reached HK$15.8 billion ($2 billion) in January, up from HK$3.37 billion for the same month in 2016, the Hong Kong Economic Journal reported.

The offshore yuan weakened 0.11 percent to 6.8351 versus the greenback on Wednesday, paring this week’s gain to 0.5 percent. Bloomberg’s dollar index rebounded slightly after reaching the lowest level since November on Tuesday as the Trump administration reiterated its preference for a weaker currency.

Trump probably hasn’t followed through on campaign pledges to label China a currency manipulator because the yuan’s been stronger than he anticipated, Terry Branstad, the U.S. president’s pick as ambassador to China, said Tuesday.

China’s official factory gauge continued to show signs of stabilization, data showed Wednesday, with the manufacturing purchasing managers index at 51.3 in January, compared with the median estimate of 51.2 in a Bloomberg survey of economists and a reading of 51.4 in December.

  • Energy firms fell, with PetroChina Co. and Kunlun Energy Co. both losing 1.5%. Oil held below $53 a barrel as U.S. industry data showed crude stockpiles expanded, offsetting cuts from OPEC producers including Iraq.
  • Want Want China Holdings Ltd. slid 3.1% in the worst performance on the Hang Seng Index after its 14-day Relative Strength Index indicated the stock was overbought last Friday.
  • Yingde Gases Group Co. jumped 3.6% after the firm’s board failed to agree on a panel needed to review an offer from Air Products & Chemicals Inc. The U.S. company, which has offered to pay at least HK$5.50 a share, has $3 billion in cash to spend on acquisitions, Chief Executive Officer Seifi Ghasemi said Friday.
  • Exporters dropped on concern that the U.S.’s protectionist policies may weigh on earnings, said Mikey Hsia, a trader at Sunrise Brokers LLP in Hong Kong. Man Wah Holdings Ltd. tumbled 5.8% to the lowest since May, while Global Brands Group Holding Ltd. lost 4.1%.
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