HK, China stocks fall on Beijing tightening woes
Sunday, 31 January 2010
HONG KONG/SHANGHAI, Jan 29 (Reuters); Hong Kong shares posted their worst monthly percentage fall in 15 months Friday, as investors dumped Chinese banks on wariness over Beijing's moves to curb lending growth.
But Li & Fung outperformed with a 10.22-per cent gain, closing at HK$35.60, its highest since November 2007. The stock was one of the top gainers and actively traded in the Hong Kong bourse. The consumer goods exporter sealed a deal with Wal-Mart Stores to supply the US retailer with goods valued at $2 billion in the first year.
The benchmark Hang Seng Index ended down 1.15 per cent or 234.38 points at 20,121.99, its lowest in nearly five months. Turnover rose to HK$69.5 ($8.9 billion), up from Thursday's HK$65.98 billion.
"Chinese government policy actions are hurting the market, especially the banks," said Daniel Chan, senior investment strategist with DBS Bank.
"Banks will continue to be under pressure, especially if the government takes more steps to control lending such as higher reserve requirement. The last resort is to raise interest rates."
The HSI is trading slightly above its 200-day moving average, often used by investors as an indicator of longer-term trend changes. The last time the Hang Seng index closed below its 200-day moving average was on April 30, 2009.
The China Enterprises Index of top locally listed mainland Chinese stocks was down 1.18 per cent at 11,498.20.
Debutant SouthGobi Energy Resources was down 11.1 per cent on its trading debut.
Chinese banks fell, with China Construction Bank down 2.29 per cent and Industrial Commercial Bank of China 2.06 per cent lower. HSBC fell 1.70 per cent.
China Life was up 1.46 per cent, after China's biggest insurer said it expected its profit for 2009 to rise more than 50 per cent.
Foxconn International Holdings, which makes iPhone handsets for Apple, added 1.85 per cent. Foxconn is expected to be a potential supplier for Apple's new iPad tablet computer.
China's key stock index slipped 0.16 per cent Friday and posted only its second monthly fall in more than a year, with financial and property shares soft as heavy new share supplies and liquidity tightening steps weighed.
The Shanghai Composite Index ended at 2,989.292 points, closing below the psychologically important 3,000 point mark for a third session.
The index marked an 8.8-per cent monthly loss, breaking a four-month rising streak under the pressure of heavy new share supplies and government liquidity tightening steps, including moves to clamp down on bank credit and a surprising rise in banks' reserve requirement ratio by half a percentage point in mid-January.
Gaining Shanghai A shares outnumbered losers by 503 to 360, while turnover remained sluggish at 95 billion yuan ($13.92 billion), although it was up from Thursday's four-month low of 85 billion yuan.
But Li & Fung outperformed with a 10.22-per cent gain, closing at HK$35.60, its highest since November 2007. The stock was one of the top gainers and actively traded in the Hong Kong bourse. The consumer goods exporter sealed a deal with Wal-Mart Stores to supply the US retailer with goods valued at $2 billion in the first year.
The benchmark Hang Seng Index ended down 1.15 per cent or 234.38 points at 20,121.99, its lowest in nearly five months. Turnover rose to HK$69.5 ($8.9 billion), up from Thursday's HK$65.98 billion.
"Chinese government policy actions are hurting the market, especially the banks," said Daniel Chan, senior investment strategist with DBS Bank.
"Banks will continue to be under pressure, especially if the government takes more steps to control lending such as higher reserve requirement. The last resort is to raise interest rates."
The HSI is trading slightly above its 200-day moving average, often used by investors as an indicator of longer-term trend changes. The last time the Hang Seng index closed below its 200-day moving average was on April 30, 2009.
The China Enterprises Index of top locally listed mainland Chinese stocks was down 1.18 per cent at 11,498.20.
Debutant SouthGobi Energy Resources was down 11.1 per cent on its trading debut.
Chinese banks fell, with China Construction Bank down 2.29 per cent and Industrial Commercial Bank of China 2.06 per cent lower. HSBC fell 1.70 per cent.
China Life was up 1.46 per cent, after China's biggest insurer said it expected its profit for 2009 to rise more than 50 per cent.
Foxconn International Holdings, which makes iPhone handsets for Apple, added 1.85 per cent. Foxconn is expected to be a potential supplier for Apple's new iPad tablet computer.
China's key stock index slipped 0.16 per cent Friday and posted only its second monthly fall in more than a year, with financial and property shares soft as heavy new share supplies and liquidity tightening steps weighed.
The Shanghai Composite Index ended at 2,989.292 points, closing below the psychologically important 3,000 point mark for a third session.
The index marked an 8.8-per cent monthly loss, breaking a four-month rising streak under the pressure of heavy new share supplies and government liquidity tightening steps, including moves to clamp down on bank credit and a surprising rise in banks' reserve requirement ratio by half a percentage point in mid-January.
Gaining Shanghai A shares outnumbered losers by 503 to 360, while turnover remained sluggish at 95 billion yuan ($13.92 billion), although it was up from Thursday's four-month low of 85 billion yuan.