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=ASIA MARKETS: Hong Kong Shares Slide After US-Led Military Strikes On Syria

HONG KONG (Apr 16) -- Hong Kong shares fell on Monday morning as risk appetite soured after the U.S.-led missile strikes on Syria.

Russian aluminum producer United Company Rusal tumbled 22.6%, following a 56% plunge last week, amid worries that U.S. sanctions imposed earlier this month on Russia, an ally of Syria, may be expanded.

The Hang Seng Index had fallen 1.5% to 30,355.93 by the midday break. Mainland lenders Industrial & Commercial Bank of China (ICBC) and China Construction Bank (CCB) declined 2.2% and 2.1%, respectively. Tencent Holdings, which dropped 1.5%, and insurer AIA Group, which shed 2.4%, were among the top contributors to losses on the gauge.

Over the weekend, the U.S., along with France and Britain, conducted missile strikes on Syria in response to a suspected chemical weapon attack on a rebel-held town earlier this month. The Pentagon said the missiles targeted chemical weapons facilities.

Syria-related war worries and concern about capital flight because of a weakened Hong Kong dollar were “both putting pressure on the Hong Kong stock market,” said Andy Wong, chief investment strategist at wealth-management company Harris Fraser (International).

The Hong Kong dollar was at 7.8495 to a U.S. dollar on Monday, trading near the lower end of its set range of 7.75 to 7.85 against the greenback. Last week, the Hong Kong dollar’s weakness prompted the Hong Kong Monetary Authority to intervene in the foreign exchange markets to support the currency’s peg. Hibor with a three-month tenor rose to 1.26% on Monday, near its highest level since January.

In the mainland, the Shanghai Composite was down 1.5% on Monday while its Shenzhen counterpart dropped 0.7%. The Nikkei Asia300 Index of regional companies lost 0.7%.

Macau casino operators Galaxy Entertainment Group, SJM Holdings and Sands China fell 3.2%, 1.8% and 1.5% in Hong Kong, respectively, after China announced plans to set up a free trade zone in the island province of Hainan and explore development of sports lottery and horse-racing events in the province. The move fueled speculation that Macau’s allure as a destination for gambling-related activities may be weakened.

Ping An Insurance Group slipped 1.5% amid broad market declines, despite reporting a 20.6% increase from a year before in January-March life insurance business gross premium income to 189.75 billion yuan ($30.2 billion). China Life Insurance was down 1.4% after reporting a 1.1% decrease in gross premium income for the quarter. China Taiping Insurance Holdings fell 3.7%. On Friday, the company reported a 2% drop in quarterly gross premium income.

Alibaba Pictures Group, an affiliate of Alibaba Group Holding, declined 1% after saying it expected to report a net loss of 1.6 billion yuan to 1.7 billion yuan for the 15 month-period ended March 31.

Financial services company Hao Tian Development Group climbed 5.4% after saying late on Sunday that it had agreed to acquire Done and Dusted Productions, a global television and events production company, for $89.6 million.

- By Amy Lam;; +852 39605150
- Edited by Suzannah Benjamin
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