Hong Kong stocks reverse gains on Middle East tensions

Hong Kong stocks reversed gains to end lower on Friday, as investors worried about heightening geopolitical tensions in the Middle East after a U.S. airstrike at Baghdad airport killed a top Iranian commander.

But stocks on the island managed to wrap up the first week of the new decade higher with a five-week winning streak, thanks to an accommodative stance by China's central bank and a thaw in Sino-U.S. trade tensions. ** The Hang Seng index fell 0.3%, to 28,451.50, after climbing as much as 1.2% to a six-month high, while the China Enterprises Index lost 0.6%, to 11,253.55.

** For the week, HSI increased 0.8%, while HSCE moved up 0.5%, both up for the past five weeks in a row. ** Iranian Major-General Qassem Soleimani, head of the elite Quds Force and top Iraqi militia commander Abu Mahdi al-Muhandis were killed early on Friday in a U.S. airstrike on their convoy, the Pentagon and Iran said.

** The tensions in the Middle East after the U.S. airstrike was the main reason that knocked Hong Kong stocks off from a six-month high on Friday, Ample Finance Group analyst Alex Wong said. ** Besides, market participants also tended to pocket gains after a recent rally, Wong added.

** The benchmark Hang Seng index had advanced 7% in the last month of 2019 amid signs of progress in Sino-U.S. trade talks. ** Investors were expecting a signing of a Phase 1 trade deal between China and the U.S. on Jan. 15.

** Beijing's latest stimulative measures also added to support the market. ** China's central bank said on Wednesday it was cutting the amount of cash that all banks must hold as reserves, releasing around 800 billion yuan ($114.76 billion) in funds to shore up the slowing economy.

** Reuters reported on Friday that China has decided to keep its inflation target unchanged this year at around 3%, suggesting policymakers will continue to roll out economic stimulus gradually and avoid more aggressive measures. ** Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.18%, while Japan's Nikkei index was down 0.76%.

** The yuan was quoted at 6.9733 per U.S. dollar, 0.13% weaker than the previous close of 6.9643. ** As of 08:08 GMT, China's A-shares were trading at a premium of 26.62% over the Hong Kong-listed H-shares.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)