Hong Kong stocks end in the red on global cues

The Hong Kong stock market fell Thursday, taking its cues from regional bearishness and a sharp plunge on the Shanghai stock exchange.

The Shanghai stock exchange was hit by an avalanche of IPOs that drained liquidity and put pressure on listed stocks. Eleven IPOs open for subscription Thursday, and another nine will follow on Friday.

Global stocks were under pressure following the US Fed monetary policy meeting and a statement by Fed Chair Janet Yellen that there would be “only gradual increases” in interest rates, if the US economy proved robust enough.

Indices and sectors

The benchmark Hang Seng Index fell 59.13 points, or 0.22 per cent, and closed at 26,694.66, recording a turnover of HK$106.20 billion (£8.62 billion). 

The Hang Seng China Enterprises Index was down 151.46 points, or 1.13 per cent, to 13,263.37. Turnover amounted to HK$17.45 billion.

On the Chinese mainland, the SSE Composite lost 182.54 points, or 3.67 per cent, at 4,785.36. 

The HSI Finance sector fell 0.39 per cent, Properties was up 0.43 per cent and Commercial & Industrial fell 0.22 per cent. However, Utilities rose 0.12 per cent.

Stocks

The Board of Directors of the Hong Kong Exchange (HKEX) approved a proposal for the introduction of circuit breakers and closing auction to be implemented next year. 

HKEX CEO Charles Li also clarified at the same board meeting that though the Shenzen-Hong Kong Stock Connect was delayed, work on its implementation was in progress, and that it would be launched in the second half of this year.

In the finance sector, the top gainers were Bank of East Asia (+0.870 per cent, HK$34.80), BOC Hong Kong (+0.864 per cent, HK$32.10) and HSBC Holdings (+0.695 per cent, HK$72.40). The big losers were Page 2 The ASX gains 1.4 per cent Bankcomm (-2.393 per cent, HK$7.75), China Life (-2.16 per cent, HK$33.95) and Bank of China (-1.15 per cent, HK$5.16).

In properties, the top gainers were China Res Land (+2.459 per cent, HK$25.00), Link REIT (+1.82 per cent, HK$47.55), China Overseas (+1.085 per cent, HK$27.95). The losers included Sino Land (-0.91 per cent, HK$13.02), Henderson Land (-0.74 per cent, HK$53.35) and Hang Lung PPT (-0.60 per cent, HK$23.65). 

According to market speculation, the Chinese mainland regulatory authorities may consider lifting the current restrictions on the purchase of properties in China by foreigners, a factor which cost a spurt in China Res Land.

In commercial and industrial sector, the top gainers were China Resources (+8.18 per cent, HK$25.80), Sinopec Corp (+1.87 per cent, HK$6.55) and Sands China Ltd (+1.19 per cent, HK$29.85). The big losers were China Unicom (-3.98 per cent, HK$12.08), China Mer Hold (-2.21 per cent, HK$33.15) and CNOOC (-1.44 per cent, HK$10.98). China Resources surged on news that its parent company had increased the consideration for the acquisition of its non-beer business by HK$2 billion to HK$30 billion.

In utilities, Power Assets was up 0.70 per cent to HK$71.80, while China Res Power fell 2.09 per cent to HK$21.05.

Economic news

During April 2015, total exports of goods from Hong Kong increased 1.3 per cent on a year-on-year basis, while imports fell 2.1 per cent, according to data from the Census and Statistics Department (C&SD). The terms of trade index increased by 1.2 per cent in April 2015 compared to April 2014.

Latest employment data released by the Census and Statistics Department (C&SD) showed that the number of jobs fell by 12,200 during the period in February-April 2015 compared to the March-May 2015 period, while the unemployment rate remained unchanged at 3.2 per cent. However, the underemployment rate moved up from 1.3 per cent to 1.4 per cent in the same period.