HONG KONG’S benchmark Hang Seng Index lost 2.3% on the week, registering its seventh straight loss today with a 0.8% selloff to close at 22,420.37 on chronic concerns over interest rate action.
Meanwhile, the Shanghai Composite – which tracks A and B shares in the PRC – edged up Friday but lost 0.8% this week to finish at 2,705.14.
The poor showing in Hong Kong marked the bourse’s third consecutive weekly decline and the second seven straight day losing run in a month.
A flurry of economic data from Mainland China both released and expected over the next few days has many investors in tire-kicking mode, with leading listed lenders driving much of the downward spiral this week.
Anxiety over the possibility of further rate action from Beijing and the wait-and-see approach adopted by many also helped trading turnover today finish at around 70 bln hkd, some 13% lower than yesterday.
The Hang Seng’s Financial Institution Sub-index lost 0.53% on the day, while the Property Sub-index – another sector captive to credit availability – did even worse today, dropping 1.30%.
China Construction Bank Corp (HK: 939), one of China’s Big-Four state-owned commercial lenders, shed 0.44% to close at 6.44 hkd, while peer Big-Four banks followed suit.
Bank of Communications (HK: 3328) fell 0.67% to 7.41 hkd, Bank of China (HK) Ltd (HK: 3988) lost 0.51% to 3.91, and ICBC (HK: 1398) shed 0.17% to 5.81.
Fellow financial sector peers in the insurance industry also fell.
Ping An Insurance (HK: 2318) was down 1.46% at 77.7 hkd while China Life (HK: 2628) lost 0.37% to 26.8.
A Chinese-language piece in Sinafinance said all eyes are on the People’s Bank of China, the country’s central bank, ahead of the release on Tuesday of May’s inflation figures.
The trading day started off attempting to digest news just released that showed the country’s imports surged last month, suggesting that the policy of promoting domestic demand amid the global slump may be bearing fruit.
But property plays were particularly edgy today ahead of possible rate action from Beijing, especially if inflation growth surprises on the upside next week.
Henderson Land Development Co Ltd (HK: 12) shed 2.79% to 48.85 hkd, Sino Land Co (HK: 83) was down 2.74% at 12.8, Hang Lung Properties Ltd (HK: 101) fell 2.27% to 30.15 and Sun Hung Kai Properties Ltd (HK: 16) dropped 2.06% to close at 114.
Meanwhile, peer developers New World Development Co Ltd (HK: 17) fell 2.06% to 12.36 hkd while Cheung Kong (Holdings) Ltd (HK: 1) lost 1.45% to close at 115.2.
Analysts say the Hang Seng should maintain a holding pattern Monday while Tuesday’s inflation figure release and the reaction from China’s central bank will set the tone for the next several sessions.
See also:
HK WEEKLY WRAP: Index Down 0.7%, Rate Fears Fuel Friday’s 1.3% Selloff
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