HK, China shares fall as investors sell risky assets
Sunday, 7 February 2010
HONG KONG/SHANGHAI, Feb 6 (Reuters): Shares in Hong Kong and China fell Friday, joining a global stock market rout, as investors dumped riskier assets on worries over sovereign debt problems in the eurozone and poor jobs data in the United States.
Hong Kong shares retreated to their lowest in five months at midday, with Europe-focused retailer Esprit Holdings and Europe's biggest bank HSBC sharply lower.
China's key stock index closed 1.87 per cent down, with resources weak as soft overseas markets, bank lending curbs and the outlook for more new share supplies weighed on the market.
The benchmark Hang Seng Index fell 3.33 per cent, its worst daily percentage drop in over two months, or 676.56 points to 19,665.08, the lowest since Sept. 2, 2009. Turnover rose to HK$77.5 billion ($10 billion) from Thursday's HK$61 billion.
The HSI closed below its 200-day moving average - often used as an indicator of longer-term trends - for the first time since April 30, 2009. For the week, the HSI fell 2.3 per cent, its third weekly drop.
The China Enterprises Index of top locally listed mainland Chinese stocks shed 4.08 per cent to 11,131.78.
"Investors are defensive," said Alfred Chan, chief dealer at Cheer Pearl Investment. "With the jobs data not so good in the US and fears of a deterioration about the fiscal situation in Portugal and Spain, the sell-off is but natural.
The market may recover next week, as investors may scoop up beaten down stocks, dealers said.
"There will be bargain-hunting. Investors will be selectively buying stocks," said Joseph Lau, managing director at Tai Fook Asset Management.
Esprit shed 4.5 per cent. The former chairman of the world's No 7 fashion retailer sold shares worth $385 million. The stock was also weighed down by concern about Europe, the retailer's biggest market overseas.
HSBC was down 3.8 per cent. Also hurting sentiment was a report that a senior US senator planned to refer HSBC Holdings to the US bank regulator in connection with questionable accounts it provided for senior Angolan officials.
Chinese PC maker Lenovo Group tumbled 10.2 per cent, after it said profit may fall in the current quarter because of higher component costs.
Metal counters extended their slide after gold prices fell to three-month lows Thursday. Gold miners Zijing Mining declined 6.8 per cent and Realgold Mining was 6.8 per cent lower. Chalco slumped 6 per cent and Angang Steel retreated 5.8 per cent.
Debutant China SCE Property reversed earlier losses to end up 4.6 per cent.
The Shanghai Composite Index ended at 2,939.402 points, posting a 1.7-per cent loss for the week and its third weekly fall in a row.
The market has been weighed down by worries about credit tightening and heavy share supplies, fuelled by steady approvals of new initial public offerings.
Resource shares were pressured by weakness on Wall Street and in the commodities markets. China Shenhua Energy sagged 3.15 per cent to 28.30 yuan, while Shandong Gold sank 4.04 per cent to 63.85 yuan.
"The index was weighed down by overseas markets and is expected to fluctuate around 3,000 points in the short term," said Xu Yinhui, senior analyst at Guotai Junan Securities in Shanghai.
Hong Kong shares retreated to their lowest in five months at midday, with Europe-focused retailer Esprit Holdings and Europe's biggest bank HSBC sharply lower.
China's key stock index closed 1.87 per cent down, with resources weak as soft overseas markets, bank lending curbs and the outlook for more new share supplies weighed on the market.
The benchmark Hang Seng Index fell 3.33 per cent, its worst daily percentage drop in over two months, or 676.56 points to 19,665.08, the lowest since Sept. 2, 2009. Turnover rose to HK$77.5 billion ($10 billion) from Thursday's HK$61 billion.
The HSI closed below its 200-day moving average - often used as an indicator of longer-term trends - for the first time since April 30, 2009. For the week, the HSI fell 2.3 per cent, its third weekly drop.
The China Enterprises Index of top locally listed mainland Chinese stocks shed 4.08 per cent to 11,131.78.
"Investors are defensive," said Alfred Chan, chief dealer at Cheer Pearl Investment. "With the jobs data not so good in the US and fears of a deterioration about the fiscal situation in Portugal and Spain, the sell-off is but natural.
The market may recover next week, as investors may scoop up beaten down stocks, dealers said.
"There will be bargain-hunting. Investors will be selectively buying stocks," said Joseph Lau, managing director at Tai Fook Asset Management.
Esprit shed 4.5 per cent. The former chairman of the world's No 7 fashion retailer sold shares worth $385 million. The stock was also weighed down by concern about Europe, the retailer's biggest market overseas.
HSBC was down 3.8 per cent. Also hurting sentiment was a report that a senior US senator planned to refer HSBC Holdings to the US bank regulator in connection with questionable accounts it provided for senior Angolan officials.
Chinese PC maker Lenovo Group tumbled 10.2 per cent, after it said profit may fall in the current quarter because of higher component costs.
Metal counters extended their slide after gold prices fell to three-month lows Thursday. Gold miners Zijing Mining declined 6.8 per cent and Realgold Mining was 6.8 per cent lower. Chalco slumped 6 per cent and Angang Steel retreated 5.8 per cent.
Debutant China SCE Property reversed earlier losses to end up 4.6 per cent.
The Shanghai Composite Index ended at 2,939.402 points, posting a 1.7-per cent loss for the week and its third weekly fall in a row.
The market has been weighed down by worries about credit tightening and heavy share supplies, fuelled by steady approvals of new initial public offerings.
Resource shares were pressured by weakness on Wall Street and in the commodities markets. China Shenhua Energy sagged 3.15 per cent to 28.30 yuan, while Shandong Gold sank 4.04 per cent to 63.85 yuan.
"The index was weighed down by overseas markets and is expected to fluctuate around 3,000 points in the short term," said Xu Yinhui, senior analyst at Guotai Junan Securities in Shanghai.