Energy and consumer stocks drag Hong Kong market; Australian bourse on slippery slope

<p>The Hong Kong market was flat in mid-day trade, dragged by energy and consumer stocks. Technology and banking sectors were strong, but did not provide […]</p>

The Hong Kong market was flat in mid-day trade, dragged by energy and consumer stocks. Technology and banking sectors were strong, but did not provide enough pull to lift the market higher.

Chinese banks were mostly lower, weight down by market speculations that the Chinese Central Bank might look into another tightening of bank deposit rate again. Hong Kong local banks HSBC and Hang Seng Bank rose 1.56% and 2% respectively and provided some support to the Hong Kong Index.

Commodity related stocks were also out of investor favour due to weakness in commodity prices. Gold producer Zijing Mining (2899.HK) and Real Gold Mining (0246.HK) fell more than 2% during the early trading session.

The Singapore stock market recovered its early losses and managed to close flat at mid-day. Commodity suppliers dropped with Noble Group and Olam International Ltd, losing 0.88% and 0.61% respectively.

Capital Land, the local developer, rose over 1% after the company announced possible listing in China. Local logistic company, Global Logistic Property gained 0.93% after the company released agreement to buy a stake at Airport City Development to gain access to second tier Chinese cities.

It feels like a slippery slope for the Australian share market today as it continued to slide down from the open of trade. We saw some big sell-off in commodities overnight – including gold, which lost about $20 and copper, which has been having a good run the past few weeks, also lost some ground.

Given the good run among the local miners and resources companies, this fall in commodities prices put the local market in a bit of an unsteady ground today.

Traders and investors are still on holiday mode this week, and given the low volumes, any single sell-off could trigger a massive fall in the market. And this is what we saw in local trading today.

However, there could also be a bit of profit taking. I don’t think this is panic selling at all. I think investors may see this as a buying opportunity — to get into value buys on any pullback.

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.