Triple threat pulls down benchmark

Top News | Reuters and Joyce Chen Apr 17, 2018
Hong Kong shares dropped yesterday amid worries that a weak Hong Kong dollar, slowing credit growth and tightening regulatory requirements in China will hurt the mainland's economic growth later in the year.

The Hang Seng Index fell 1.6 percent, or 492.79 points, to 30,315.59, while the China Enterprises Index lost 2.1 percent, to 12,008.13.

Night futures were little changed as of 8.30pm local time, up 0.19 percent to 30,238.

First-quarter GDP data, due for release today, are expected to show the economy carried most of its growth momentum from last year into early this year, with analysts predicting an expansion of 6.7 percent on-year, only marginally softer than the 6.8 percent reported in the fourth quarter, according to a Reuters poll.

Local insurance giant AIA Group fell 3.97 percent to HK$67.70, the lowest in 10 days, while "Share King" Tencent Holdings dropped 1.23 percent to HK$403.

United Company Rusal continued to slump, once touching the bottom of HK$1.41. It closed at HK$1.43, down 29.9 percent.

The sub-index of the Hang Seng tracking energy shares dipped 1.3 percent, while the IT sector slipped 1.1 percent. The financial sector was 1.88 percent lower, while the property sector dipped 2.02 percent.

Yesterday's top gainer was BOC Hong Kong Holdings which rose 1.73 percent, while the biggest loser was China Shenhua Energy, which tumbled 4.12 percent.

Around 1.88 billion HSI shares were traded, about 100.8 percent of the market's 30-day moving average of 1.87 billion shares a day.

The volume traded in the previous trading session was 1.45 billion. The top gainer among H-shares was Guangdong Investment, which gained 2.81 percent and closed at HK$12.42, and the biggest H-shares loser in percentage terms was Anhui Conch Cement, which fell 5.06 percent to HK$44.05.

At market close, China's A-shares were trading at a premium of 22.58 percent over Hong Kong-listed H-shares.

Sean Taylor, DWS group managing director and chief investment officer in the Asia-Pacific, said H-shares are likely to outperform the HSI this year as the index included more interest-rate sensitive stocks, like estates and utilities.

Investment worthy sectors include consumer discretionary, technology, mainland properties and mainland banks, which could benefit from an uptrend in sovereign bond yields and the Chinese government's bid to clean up shadow banking, he said.

The HSI though will remain flat this year, he added.

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