HK, China shares fall as banks, developers drop
Sunday, 22 November 2009
HONG KONG/ SHANGHAI, Nov 21 (Reuters): Shares in Hong Kong and Shanghai fell Friday, tracking losses in other Asian markets, while Chinese lenders dropped on reports Beijing may adjust their reserve requirements.
In China, the Shanghai Composite Index ended down 0.37 per cent at 3,308.346 points, snapping a five-session winning streak. For the week, the index rose 3.8 per cent, its third consecutive weekly rise.
The benchmark Hang Seng Index closed down 0.83 per cent, or 187.32 points, at 22,455.84, the lowest in more than a week. The index was down 0.43 per cent for the week, reversing a 3.3 per cent gain in the previous week.
Turnover fell to HK$60.5 billion ($7.8 billion), the lowest since Nov 4, from HK$69.3 billion Thursday.
"People are staying on the sidlines right now, after yesterday's correction in the US," said Alex Wong, director at Ample Finance Group. "We will probably continue to trade in a narrow range until next week."
"In early December, we will have a new set of data from the US and China that could provide direction in the market."
The market is consolidating after the index hit 23,000 points twice this week, a level not seen since July 2008.
Chinese lenders ICBC slid 1.46 per cent and Bank of Communications slipped 1.34 per cent.
In Shanghai, Bank of China shed 0.69 per cent to 4.34 yuan, while ICBC lost 1.26 per cent to 5.48 yuan.
China may adjust bank reserve requirement ratios next year as the country's economy steadies, a former Chinese central bank official was quoted as saying in the Shanghai Securities News.
Local developers Hang Lung Properties fell 3.23 per cent and Henderson Land lost 1.54 per cent on profit-taking. Developers gained Thursday on news Hong Kong will auction two residential sites in December to ease land supply.
The China Enterprise Index of top locally listed mainland Chinese stocks slid 1.05 per cent to 13,329.66.
Aluminum Corp of China was down 2.29 per cent. The increase in power rates in China is expected to raise production costs for aluminium smelters such as Chalco. GOME Electrical Appliances was 1.83 per cent lower.
The company said it had repurchased 498.4 million yuan ($72.99 million) worth of bonds due in 2014 over the counter.
Bucking the trend, BYD Co rose 4.94 per cent after saying its automobile business had maintained strong growth.
China Tontine Wines 0389.HK and Longfor Properties, which debuted Thursday, extended their gains.
Tontine advanced 4.05 per cent and Longfor was up 1.25 per cent.
GCL-Poly Energy Holdings rose for a second day, up 4 per cent. The company rose on Thursday after it said it would sell a 20 per cent stake to China Investment Corp.
China Strategic fell 1.69 per cent. The Taiwan government is concerned that the buyers of AIG's Nan Shan Life insurance unit, China Strategic and Primus Financial, are backed by China-sourced funds, complicating the approval process behind the $2.15 billion deal.
Gaining Shanghai A shares outnumbered losers by 475 to 408 inShanghai, as heavily weighted banks shares led the decline.
Turnover picked up to 200 billion yuan ($29.29 billion) from Thursday's 194 billion yuan.
Analysts said market sentiment remained upbeat with a strong outlook for economic recovery and corporate earnings growth, while the day's pullback in bank shares was modest.
"A rise in bank reserve ratios next year would not be a surprise. The banking sector is just showing a mild reaction to the news," said Li Wenhui, senior analyst at Huatai Securities in Nanjing.
Following the gains of recent weeks, the 14-day Relative Strength Index has risen to 72, above the overbought mark of 70.
The market may be vulnerable to bouts of profit-taking but the broader uptrend remains intact and the index could breach the high for the year, set in August at 3,478 points, in coming weeks, analysts said.
"The index may consolidate to make brief technical adjustments as it rises, but it would be risky to take a pessimistic stance at this moment," said Nanjing Securities analyst Wen Lijun. "The index could hit a new high for the year over the next month as monetary policy is unlikely to change in coming months."
Power sector shares surrendered most of their early gains.
Huaneng Power was up 0.12 per cent at 8.54 yuan, and Yunnan Wenshan Electric Power climbed 3.52 per cent to 9.40 yuan after news that Beijing raised retail power prices for non-residential users.
In China, the Shanghai Composite Index ended down 0.37 per cent at 3,308.346 points, snapping a five-session winning streak. For the week, the index rose 3.8 per cent, its third consecutive weekly rise.
The benchmark Hang Seng Index closed down 0.83 per cent, or 187.32 points, at 22,455.84, the lowest in more than a week. The index was down 0.43 per cent for the week, reversing a 3.3 per cent gain in the previous week.
Turnover fell to HK$60.5 billion ($7.8 billion), the lowest since Nov 4, from HK$69.3 billion Thursday.
"People are staying on the sidlines right now, after yesterday's correction in the US," said Alex Wong, director at Ample Finance Group. "We will probably continue to trade in a narrow range until next week."
"In early December, we will have a new set of data from the US and China that could provide direction in the market."
The market is consolidating after the index hit 23,000 points twice this week, a level not seen since July 2008.
Chinese lenders ICBC slid 1.46 per cent and Bank of Communications slipped 1.34 per cent.
In Shanghai, Bank of China shed 0.69 per cent to 4.34 yuan, while ICBC lost 1.26 per cent to 5.48 yuan.
China may adjust bank reserve requirement ratios next year as the country's economy steadies, a former Chinese central bank official was quoted as saying in the Shanghai Securities News.
Local developers Hang Lung Properties fell 3.23 per cent and Henderson Land lost 1.54 per cent on profit-taking. Developers gained Thursday on news Hong Kong will auction two residential sites in December to ease land supply.
The China Enterprise Index of top locally listed mainland Chinese stocks slid 1.05 per cent to 13,329.66.
Aluminum Corp of China was down 2.29 per cent. The increase in power rates in China is expected to raise production costs for aluminium smelters such as Chalco. GOME Electrical Appliances was 1.83 per cent lower.
The company said it had repurchased 498.4 million yuan ($72.99 million) worth of bonds due in 2014 over the counter.
Bucking the trend, BYD Co rose 4.94 per cent after saying its automobile business had maintained strong growth.
China Tontine Wines 0389.HK and Longfor Properties, which debuted Thursday, extended their gains.
Tontine advanced 4.05 per cent and Longfor was up 1.25 per cent.
GCL-Poly Energy Holdings rose for a second day, up 4 per cent. The company rose on Thursday after it said it would sell a 20 per cent stake to China Investment Corp.
China Strategic fell 1.69 per cent. The Taiwan government is concerned that the buyers of AIG's Nan Shan Life insurance unit, China Strategic and Primus Financial, are backed by China-sourced funds, complicating the approval process behind the $2.15 billion deal.
Gaining Shanghai A shares outnumbered losers by 475 to 408 inShanghai, as heavily weighted banks shares led the decline.
Turnover picked up to 200 billion yuan ($29.29 billion) from Thursday's 194 billion yuan.
Analysts said market sentiment remained upbeat with a strong outlook for economic recovery and corporate earnings growth, while the day's pullback in bank shares was modest.
"A rise in bank reserve ratios next year would not be a surprise. The banking sector is just showing a mild reaction to the news," said Li Wenhui, senior analyst at Huatai Securities in Nanjing.
Following the gains of recent weeks, the 14-day Relative Strength Index has risen to 72, above the overbought mark of 70.
The market may be vulnerable to bouts of profit-taking but the broader uptrend remains intact and the index could breach the high for the year, set in August at 3,478 points, in coming weeks, analysts said.
"The index may consolidate to make brief technical adjustments as it rises, but it would be risky to take a pessimistic stance at this moment," said Nanjing Securities analyst Wen Lijun. "The index could hit a new high for the year over the next month as monetary policy is unlikely to change in coming months."
Power sector shares surrendered most of their early gains.
Huaneng Power was up 0.12 per cent at 8.54 yuan, and Yunnan Wenshan Electric Power climbed 3.52 per cent to 9.40 yuan after news that Beijing raised retail power prices for non-residential users.