HONG KONG, Sept 18: Hong Kong and China shares slipped early today, ahead of an expected paring of stimulus by the U.S. Federal Reserve later in the day and a two-day holiday in the mainland.
Most Chinese property counters were put on the defensive after official data showed new home prices in the world’s second-largest economy climbed 0.8 percent in August from July and 8.3 percent in August from a year earlier.
At midday, the Hang Seng Index – which ended on Monday at its highest since May 22 – was down 0.3 percent at 23,105.8 points. The China Enterprises Index of the top Chinese listings in Hong Kong sank 0.6 percent.
The CSI300 of the leading Shanghai and Shenzhen A-share listings fell 0.3 percent, while the Shanghai Composite Index lost 0.2 percent with midday volumes at their weakest in almost two weeks.
The two mainland indexes are now down 2.8 and 2.5 percent this week, respectively. Last week, they had their biggest weekly gains since February.
China markets will be shut after Wednesday for the Mid-Autumn Festival, while Hong Kong will be closed on Friday for the holiday.
‘There’s an element of pre-holiday de-risking in the A-share market after the big jump we saw last week,’ said Hong Hao, chief strategist at Bank of Communications International Securities.
Hong said he expects yields on 10-year Treasury notes to fall ‘whatever the Fed says later’ as they are relatively high , and lower yields could boost stock markets.
The Fed is expected to release its decision at about 1800 GMT. The Federal Open Market Committee (FOMC) is expected to be measured in any cuts to its $85 billion in monthly asset buying, while also seeking to reassure investors that the day of an actual policy tightening is still distant.
On Wednesday, Hong Kong property counters were among the leading index boosts, with Cheung Kong Holdings up 2.2 percent, New World Development 1.5 percent and Sun Hung Kai Properties 0.7 percent.
A buoyant Hong Kong property sector helped cushion tepid Chinese peers after official data showed mainland new home prices rising at the fastest rate in at least 2-1/2 years in August, complicating Beijing’s efforts to keep prices in check.
The impact on the stock market was muted in the mainland, but more visible in Hong Kong, where China Resources Land sank 2.2 percent and Country Garden slipped 0.4 percent.
Bank of East Asia sank 3.4 percent, paring most of Tuesday’s gains on hopes it could also receive a takeover offer after another family-owned institution, Wing Hang Bank , said it did. Wing Hang shares shed 1.6 percent.
Chinese internet giant Tencent Holdings was the top drag on the Hang Seng benchmark, sinking nearly 3 percent after signing a $448 million deal to buy a 36.5 percent stake in Sohu’s Sogou search engine.
China shipping counters in Hong Kong again saw gains as the Baltic Dry Index surged more than 5 percent to its highest since December 2011 – shrugging off a clutch of downgrades as analysts warn of a potential fall in freight rates.
China Shipping Development jumped 3.8 percent in spite of getting downgraded on Wednesday by Barclays from overweight to equal weight. The stock, which closed Tuesday at its lowest in nearly two weeks, is still up 46 percent from a June 13 trough.
(agencies)
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