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Tuesday, August 25, 2015, 16:32

Hang Seng snaps 7-day losing streak

By Agencies/chinadailyasia.com

Hong Kong's flagship Hang Seng Index rose on Tuesday, breaking a seven-day losing streak, as investor sentiment improved amid a recovery in some regional markets.

But a key index tracking major Chinese companies listed in Hong Kong fell for the eighth straight day, dragged lower by a second day of panic-selling in Chinese mainland markets.

The Hang Seng Index rose 0.7 percent, to 21,404.96, while the China Enterprises Index lost 0.9 percent, to 9,514.04 points.

Turnover totaled HK$134.5 billion (US$17.35 billion).

Three of the four sub-indices gained ground. The Commerce & Industry sub-index rose the most at 1.03 percent, followed by the Properties at 0.76 percent and the Finance at 0.56 percent, while the Utilities dropped 0.25 percent.

Banking giant HSBC, which accounts for the largest weighting of the Hang Seng Index, retreated 0.64 percent to HK$61.7.

Bank of East Asia, one of the largest local banks in Hong Kong, rose 1.53 percent to close at HK$26.5.

Local bourse operator HKEX edged up 2.73 percent to HK$180.

China Mobile, China's dominant mobile carrier, gained 0.33 percent to HK$92.65. China Unicom, another Chinese telecom giant, fell 2.08 percent to HK$10.38.

Local property stocks closed mixed. Sun Hung Kai Properties, one of Hong Kong's largest property developer by market value, fell 1.54 percent to HK$96.2. Henderson Land rose 1.63 percent to HK$46.85. CKH Holdings gained 3.81 percent to HK$102.3.

Mainland-based financial stocks closed down. Bank of China slid 2.43 percent to close at HK$3.61. China Construction Bank fell 1.09 percent to HK$5.46. Bank of Communication went down 1.18 percent to HK$5.88. ICBC lost 1.5 percent to HK$4.63.

As for energy stocks, China's top refiner Sinopec dropped 1.95 percent to HK$5.04. PetroChina, the country's largest oil and gas producer, shed 1.73 percent to HK$6.24. CNOOC moved down 2.35 percent to HK$7.91.

Mainland stocks have lost nearly 20 percent over the past two trading sessions, in a crash that has sent shockwaves across global markets, but some investors believe pessimism has been overly excessive in Hong Kong.

Although the slump in mainland shares is affecting their Hong Kong-listed peers, "we believe offshore markets have been unfairly punished during the recent period of volatility," wrote Helen Zhu, head of China Equities at asset manager BlackRock. "Valuations are attractive and at support levels."

Speaking at a forum on Tuesday, Financial Secretary John Tsang Chun-wah said the Hong Kong stock market showed high volatility over the past week as world markets plunged.

But he said Hong Kong's financial system is sound and healthy and that there is no need for the government to intervene.

He said he believes regulatory authorities and stakeholders have enough experience to handle market volatility.

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