Hong Kong shares edged lower on Tuesday dragged by property names focused on the territory in anticipation of a slowdown in global growth and the Hong Kong property market, but resilience in China-related names could limit losses.
Early gains were cut as European and United States stock futures traded down following data showing German gross domestic product growth slowing more than expected in the second quarter, suggesting markets remain fragile despite a mild rebound after the Hang Seng's worst fortnight in 2-1/2 years.
"There's a much more direct link with what's going on in the US in Hong Kong via the currency peg, and our basic concern is that we will still see capital outflow from Hong Kong, as we have begun to see already," said Colin Bradbury, Daiwa Capital Markets' regional chief strategist for Asia ex-Japan.
The Hang Seng Index closed down 0.2 percent at 20,212.1 points, with China-names cutting losses as the China Enterprise Index of the top Hong Kong-listed Chinese companies, also known as H-shares, ending little changed at 10,946.64 points. In a further sign of caution, turnover staying below its 20-day average as the benchmark briefly hovered above a key near-term resistance at its August 2010 low, around 20,379, in morning trade.
CNOOC Ltd, Industrial and Commercial Bank of China (ICBC) and Bank of China were among the top boosts to the benchmark. Chinese cement giant, Anhui Conch Cement Co Ltd was up 4.2 percent in Hong Kong in strong volume after reporting a 234 percent jump in first-half net profit. Its Shanghai-listing rose 1.1 percent.
Hong Kong property names such as Henderson Land and Sun Hung Kai Properties Ltd both ended lower on the day. A government official warned last Friday that Hong Kong's property market was overheated and could be headed for a correction after a government auction of residential land missed forecasts by 32 percent.
The Shanghai Composite Index closed down 0.7 percent at 2,608.2 points in average turnover, snapping a four-day winning streak as investor took profits on medical and property names. But analysts strongly expect the index to rise further as the authorities may slow the pace of monetary policy tightening due to uncertainties in global markets.
"When the international environment goes bad, the market expects the government to loosen its tightening policies," said Cheng Yi, a senior analyst at Xiangcai Securities in Shanghai. "That would serve to support a rise in the index." The Shanghai property sub-index declined 2.1 percent while Zhonghong Real Estate Co Ltd the biggest loser in the property sector, lost 4.6 percent. The medicine sector underperformed. Shan Dong Dong E E Jiao Co dropped 3.7 percent after jumping 29 percent since late June, while Zhejiang Huahai Pharmaceuticals Co was down 2.7 percent.
Comments
Comments are closed.