Hong Kong stocks correct after two days of losses

<p>Political considerations continue to weigh on investors’ minds.</p>

Hong Kong stocks rebounded on Wednesday (June 17th) after two down days, though the market had a cautious undertone given that legislators are soon to debate an electoral reform plan that may reignite protests. 

Sentiment was positively impacted by news that the reform plan proposed by Bank of Communications (Bankcomm) was approved by the Chinese State Council, leading to hopes that other Chinese SOE’s may follow suit. 

On the negative side, there was some trepidation following news that the highly anticipated Hong Kong Shenzen Connect may be delayed until next year. 

Chinese listed stocks may continue to suffer from an outflow of investors’ funds chasing the flood of IPOs in the pipeline this week - estimated to soak up ¥7 trillion (£708 trillion) of capital, according to Reuters.

Indices and sectors

The benchmark Hang Seng Index gained 187.09 points, or 0.7 per cent, and closed at 26,753.79, recording a turnover of HK$120.82 billion (£9.8 billion). 

The Hang Seng China Enterprises Index was up 161.90 points, or 1.22 per cent, to 13,414.83. Turnover amounted to HK$23.65 billion.

On the Chinese mainland, the SSE Composite gained 80.47 points, or 1.65 per cent, at 4,967.90. 

The HIS Finance sector gained 0.80%, Properties was up 0.73 per cent and Commercial & Industrial rose 0.6 per cent. However, Utilities fell 0.01 per cent.


In the financial sector, the Bank of China (+2.16 per cent, $5.21), Bankcomm (+1.66 per cent, $7.94), China Life Insurance (+1.61 per cent, $34.75), Ping An Insurance (+1.28 per cent, $111.00) and BOC Hong Kong (+1.25 per cent, $32.35) were the top gainers. However, HSBC Holdings (-0.14 per cent, $71.85) and Hang Seng Bank (-0.20 per cent, $152.50) lost ground.

In properties, Henderson Land (+1.98 per cent, $53.80), Sino Land (+1.08 per cent, $13.14) and China Resources Land (+1.03 per cent, $24.55) figured in the list of top gainers. China Overseas lost 0.53 per cent to $27.95.

In the commercial and industrial sector, Want Want China (+3.08 per cent, $8.38), Cathay Pacific Air (+2.48 per cent, $19.02), China Petro and Chemical (+2.23 per cent, $6.43), Galaxy Ent (+1.96 per cent, $33.80) and Lenovo Group (+1.84 per cent, $11.06) were the top winners. A prominent loser was CNOOC (-1.42 per cent, $11.10).

In utilities, China Resources Power (+0.70 per cent at $21.45) was the top gainer, while CLP Holdings (-0.54 per cent, $64.50) lost the most.

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (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.