Chinese stocks in Hong Kong decline as energy companies retreat

Business Tuesday 05/July/2016 12:12 PM
By: Times News Service
Chinese stocks in Hong Kong decline as energy companies retreat

Hong Kong: Chinese stocks traded in Hong Kong retreated from a three-week high, with energy companies declining amid lower oil prices. The Hang Seng China Enterprises Index slipped 1 percent, with PetroChina Co. and China Petroleum and Chemical Corp. among the biggest losers.
Sinopharm Group Co. slid 2.8 percent, the steepest decline on the gauge, after rallying more than 9 percent in the three days through Monday. "The market has reached a peak and it’s due for a correction because there are no positive factors pushing the market up," said Ronald Wan, chief executive at Partners Capital International Ltd. in Hong Kong.
"We are also going to see more macro economic data from mainland China and people have mixed sentiment. So there’s some profit-taking activities."
Chinese stocks rallied on Monday amid speculation the nation may provide stimulus to support growth after data last week showed industrial profits and an official manufacturing gauge slowed from the previous month. The Shanghai Composite Index extended gains on Tuesday, climbing 0.4 percent as of the mid-day break. The nation is more likely to fine-tune monetary policy in the second half with targeted cuts to bank reserve-ratio requirements or across-the-board reductions if needed, according to a commentary in the China Securities Journal, which is published by the official Xinhua News Agency. Chinese data on foreign direct investment is due as early as this week, while reports on inflation and money supply are to be released next week.
China’s benchmark stock gauge has tumbled more than 15 percent this year, one of the steepest declines among 94 global indexes tracked by Bloomberg, while turnover has dropped 70 percent since last year’s peak. The Hang Seng China Enterprises Index traded at 8,712.83 as of 11:52 a.m. in Hong Kong, while the Shanghai Composite Index climbed to 3,000.66.
The CSI 300 Index was little changed, while Hong Kong’s Hang Seng Index, which on Monday erased losses accumulated after the U.K. voted to leave the European Union, retreated 0.8 percent. China Vanke Co. tumbled by the 10 percent daily limit in Shenzhen for a second day following a six-month trading suspension.
The property developer’s board last week declined to hold an extraordinary general meeting called by units of its largest shareholder to remove almost all directors. Vanke’s shares traded in Hong Kong were up 1.6 percent, the third straight day they have risen. The Shanghai Composite will fall to 2,850 by the end of September, sliding 2.7 percent in a third consecutive quarterly decline, according to the median forecast in a Bloomberg poll of six strategists and fund managers. A deepening economic slowdown, the possibility of a yuan devaluation and selling by insiders were seen weighing on mainland equities, the survey showed. PetroChina dropped 1.3 percent in Hong Kong, while Sinopec and China Oilfield Services Ltd. retreated at least 1.4 percent. West Texas Intermediate for August delivery was at $48.34 a barrel on the New York Mercantile Exchange, down 65 cents, from Friday’s close. There was no settlement Monday because of a holiday in the U.S. China Merchants Bank Co. was among the biggest drags on the Hang Seng China Enterprises Index as it traded without the rights to receive the next dividend. Agricultural Bank of China Ltd. and Bank of Communications Co. fell at least 0.6 percent