=ASIA MARKETS: Hong Kong Shares Poised To Snap Four-Day Winning Streak
HONG KONG (Mar 14) -- Hong Kong shares on Wednesday headed for their first decline in five days after an overnight pullback on Wall Street, with shares of mainland Chinese companies listed in the city pacing losses.
The Hang Seng Index had fallen 1.3% to 31,206.31 by the noon lunchbreak. Apple supplier AAC Technologies Holdings shed 3.8% to lead losses in percentage terms on the 50-stock index, while Sunny Optical Technology Group dropped 2.3%. China Life Insurance lost 1.7%, after reporting an 18.6% decline in accumulated premium income for January and February. Industrial & Commercial Bank of China (ICBC) and China Construction Bank (CCB) fell 2.1% and 2%, respectively, setting course for their first losses in seven days.
Indexes on Wall Street ended lower on Tuesday, with the Dow Jones Industrial Average shedding 0.7% and the Nasdaq Composite falling 1% after a seven-day winning streak. U.S. President Donald Trump on Tuesday fired Secretary of State Rex Tillerson, replacing him with Central Intelligence Agency Director Mike Pompeo, the latest in a series of changes in the administration over the past year. Separately, Reuters reported that Trump is seeking to impose tariffs on up to $60 billion of Chinese imports and will target the technology and telecommunications sectors. The article cited two people who had discussed the issue with the Trump administration.
"I think Hong Kong equities will see a slower climbing path,” said Andy Wong, chief investment strategist at wealth management company Harris Fraser (International). “It is better to avoid trade-related stocks when we see a correction and buy into stocks with less correlation with the outside world.”
The Hang Seng China Enterprises Index of large mainland companies listed in the city was down 1.4% by midday.
Wong expects the city’s stock market to remain range-bound, with 32,400 pegged as a resistance level for the Hang Seng Index, and 30,500 as support.
In the mainland, the Shanghai Composite Index shed 0.6%, while its Shenzhen counterpart slipped 0.5%. The onshore-traded yuan climbed less than 0.1% to 6.3154 against the U.S. dollar. The Nikkei Asia300 Index had slipped 0.7% by noon.
Cathay Pacific Airways fell 0.9% in Hong Kong ahead of its results announcement. During the midday break, the airline reported a net loss of 1.26 billion Hong Kong dollars ($160.7 million) for 2017, widening from a loss of HK$575 million the previous year. Revenue rose 4.9% to HK$97.3 billion.
Air China lost 2.6% amid broad market losses, trimming year-to-date gains to 17.3%. Late on Tuesday, the airline reported a 10.7% increase in February passenger traffic.
Nexteer Automotive Group tumbled 15.6%. The company said late Tuesday that its 2017 profit was up about 19.4% from the previous year at $351.8 million, while revenue rose 0.9% to $3.88 billion.
Food-and-beverage distributor and retailer B & S International more than tripled in its trading debut after raising HK$100 million in gross proceeds from an initial public offering. The stock was at HK$3.06 by the noon break, compared with its IPO price of HK$1.00.
Airfreight forwarding services company A & S Group Holdings, also debuting in Hong Kong on Wednesday, rose 14.6% from its IPO price.
Cosmetics chain Sa Sa International Holdings climbed 4.7% after reporting a 14.6% increase in retail sales in Hong Kong and Macau during January and February.
- By Amy Lam; amy.lam@NikkeiNewsrise.com; +852 39605150
- Edited by Suzannah Benjamin
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