Hong Kong protests, weak US factory data weigh on city's stock market
The Hong Kong protests as well as disappointing US manufacturing data weighed on the city's stock market, which was closed on Tuesday for the National Day holiday.
The mainland Chinese markets are shut for the "golden week" holiday and will resume trading on October 8.
The benchmark Hang Seng Index closed 0.2 per cent lower at 26,042.7 on Wednesday. Sectors such as retail, financial services and utilities were among the worst performers. Chow Tai Fook, the world's largest jewellery retailer, hit HK$6.27, a one-month low, at one point before closing at HK$6.4, a decline of 1.1 per cent for the day.
Other heavyweights that weighed on the index included Chinese social media and gaming giant Tencent Holdings, Hong Kong utility CLP Holdings and city trains operator MTR.
Shares of mainland Chinese banks listed in Hong Kong also trended downwards. Bank of China (Hong Kong) lost 1.1 per cent to close at HK$26.3, for instance. The other two Hong Kong currency-issuing lenders, Standard Chartered and HSBC, also fell, by 3.9 per cent to HK$63.6 and 1.2 per cent to HK$59.7, respectively. HSBC's US unit was fined by American authorities for inaccuracies in reporting on Monday.
Later in the evening, Hong Kong's Census and Statistics Department announced retail sales in August had declined by 23 per cent a year ago to HK$29.4 billion (US$3.75 billion). August was also the seventh consecutive month of declines in retail sales.
"It seems the current market has not fully priced in risks that could stem from the Hong Kong protests," said Kakei Lam, investment strategy director at Grand View Assets Management.
He said medium-term risks also included the passage of a bill linked with Hong Kong human rights in the US, which could lead to more political disputes, and further jeopardise the city's status as a free-trade and international finance hub.
Macau casinos and mainland Chinese telecom services providers were among the biggest gainers on the day. Hong Kong property developers, too, managed to close above water. New World Development strengthened by 2.8 per cent to close at HK$10.5, while Swire Properties rose 2.2 per cent to HK$25.2.
Budweiser Brewing Company APAC shone on its second day of trading in Hong Kong, rising by 5.3 per cent to HK$29.7. Its closing price on Wednesday represented a 10 per cent gain over its initial public offering price of HK$27.
Grand View Assets Management's Lam said the company's business in mainland China offered a good hedge against the current situation in Hong Kong. He said investors could pay more attention to other upcoming IPOs by businesses that are heavily focused on the mainland.
Elsewhere, the US manufacturing purchasing managers' index from the Institute for Supply Management came in at 47.8 for September, its lowest level since June 2009, marking a second consecutive month of contraction.
"Given the figures released for August and September, US industrial recession is likely to materialise in coming months. It is the reflection of a very depressed global manufacturing outlook," Saxo Bank said in a note on Wednesday.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2019 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2019. South China Morning Post Publishers Ltd. All rights reserved.
