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Hang Seng gains 2.1% after a third consecutive weekly loss

Devdiscourse News Desk hong kong China
Updated: 13-10-2018 00:30 IST
Hang Seng gains 2.1% after a third consecutive weekly loss

The IT sector rose 5.45 per cent, supported by China's gaming and social media giant Tencent Holdings Ltd. (Image Credit: Twitter)

Shares in Hong Kong rebounded on Friday after a global equity market rout saw the Hang Seng index fall 3.5 per cent a day earlier, but ongoing concerns about the prospects for global trade and economic growth continue to dampen sentiment. The Hang Seng index ended 2.1 per cent higher at 25,801.49. The China Enterprises Index also gained 2.1 per cent to 10,299.09 points. The Hang Seng lost 2.9 per cent for the week, its third consecutive weekly loss.

The IT sector rose 5.45 per cent, supported by China's gaming and social media giant Tencent Holdings Ltd. Tencent shares surged 8 per cent, as the firm repurchased shares for a 22nd straight session but still lost 5.4 per cent for the week. The sub-index of the Hang Seng tracking energy shares rose 1.2 per cent, the financial sector was 1.8 per cent higher and the property sector climbed 1.23 per cent.

"The likes of Tencent are liquid, so they recover more quickly. The mid- and low-caps will be under more pressure. But in general, we've already had a lot of bearish news about tech, I don't think there will be more to come," said a Hong Kong-based fund manager. He said investors in mainland and Hong Kong markets have been buying consumer staples for much of the year as they are less affected by the major negative stories like a trade war. "They will recover quicker," he said.

China reported on Friday an unexpected acceleration in export growth in September and a record trade surplus with the United States, which could exacerbate an already-heated dispute between Beijing and Washington. U.S. President Donald Trump warned on Thursday there was much more he could do that would hurt China's economy further, showing no signs of backing off an escalating trade war with Beijing.

The International Monetary Fund said sustained trade tensions could slash Asia's economic growth by up to 0.9 percentage points in coming years, and warned that the market rout seen in emerging economies could worsen if the U.S. Federal Reserve and other major central banks tightened monetary policy more quickly than expected.

The top gainer on Hang Seng was Sunny Optical Technology Group Co Ltd, up 10.73 per cent, while the biggest loser was China Resources Power Holdings Co Ltd, which was down 1.20 per cent. China's main Shanghai Composite index closed 0.9 per cent higher at 2,606.91 points, after touching near four-year lows on Thursday amid a global sell-off. The index was down 7.6 per cent for the week, its worst weekly performance since early February.

Around the region, MSCI's Asia ex-Japan stock index was firmer by 2.06 per cent, while Japan's Nikkei index closed up 0.46 per cent. The yuan finished its onshore trading session at 6.9234 per U.S. dollar, 0.5 per cent weaker than the previous close of 6.8888. The offshore yuan was changing hands at 6.9161 at 0830 GMT, 0.58 per cent weaker than the previous day's close.

As of the previous trading session, the Hang Seng index was down 15.55 per cent this year, while China's H-share index was down 13.8 per cent. As of the previous close, the Hang Seng has declined 9.08 per cent this month. The top gainers among H-shares were Tencent Holdings Ltd, up 8.01 per cent, followed by China Vanke Co Ltd, gaining 6.67 per cent, and China Huarong Asset Management Co Ltd, up by 6.62 per cent.

The three biggest H-shares percentage decliners were Huaneng Power International Inc, which was down 1.49 per cent, China Telecom Corp Ltd, which fell 1.2 per cent, and Hengan International Group Company Ltd, down by 0.8 per cent. About 2.16 billion Hang Seng index shares were traded, roughly 118.2 per cent of the market's 30-day moving average of 1.83 billion shares a day.

The volume traded in the previous trading session was 3.19 billion. At the close, China's A-shares were trading at a premium of 22.67 per cent over the Hong Kong-listed H-shares. The price-to-earnings ratio of the Hang Seng index was 9.79 as of the last full trading day, while the dividend yield was 3.8 per cent.

So far this week, the market capitalisation of the Hang Seng index has fallen by 5.31 per cent to HK$16.41 trillion. The short and one-factor leveraged Hang Seng index, which is designed to replicate the payoff of a short or leveraged portfolio and is linked to the movements of the Hang Seng Index, was lower by 2.12 per cent on the day at 5,413.71 points.

(With inputs from agencies.)