Hong Kong Stocks Fall Before China Names New Leadership
Hong Kong stocks fell amid concern that an impasse about cuts to the U.S. budget will crimp global growth and as China announced new leaders. Esprit Holdings Ltd. (330) surged after the clothier’s former chairman more than doubled his stake.
The Hang Seng Index fell 1 percent to 21,237.14 as of the mid-day trading break in Hong Kong. Xi Jinping replaced Hu Jintao as head of the Chinese Communist Party, ushering in the fifth generation of leaders set to run the world’s second- biggest economy over the next decade. He was also named chairman of the party’s Central Military Commission.
All but nine stocks dropped on the 49-member gauge, which retreated 2.3 percent through yesterday since U.S. President Barack Obama was re-elected on Nov. 7. The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong declined 1.2 percent to 10,278.16.
Li & Fung Ltd., a supplier of toys and clothes to Wal-Mart Stores Inc., slid 2.5 percent. Tencent Holdings Ltd. (700), China’s biggest Internet company, dropped 4.9 percent after its third- quarter profit missed estimates. Esprit jumped 20 percent.
The benchmark Hang Seng Index (HSI) advanced 18 percent from this year’s low on June 4 through yesterday as economic data showed China’s slowdown may be bottoming and central banks around the globe added stimulus to spur growth. The index traded at 10.8 times estimated earnings compared with 13 for the Standard & Poor’s 500 Index and 12 for the Stoxx Europe 600 Index, according to data compiled by Bloomberg.
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