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  1. Hong Kong indexes fall as resources shares drag

Hong Kong indexes fall as resources shares drag

Hong Kong shares followed other Asian markets lower, as material shares in the region were hit by sudden fall in copper and other commodity prices.

By: | Shanghai | Published: February 24, 2017 12:01 PM
China’s blue-chip CSI300 index dipped 0.3 percent, to 3,463.93 by lunch break, but has gained 1.3 percent so far this week. The Shanghai Composite Index also lost 0.3 percent to 3,242.12.(Reuters)

China stocks fell on Friday morning as weakness in resources shares offset strength in small-caps, but the main indexes are poised to gain for the third straight week amid improving risk appetite. Hong Kong shares followed other Asian markets lower, as material shares in the region were hit by sudden fall in copper and other commodity prices. China’s blue-chip CSI300 index dipped 0.3 percent, to 3,463.93 by lunch break, but has gained 1.3 percent so far this week. The Shanghai Composite Index also lost 0.3 percent to 3,242.12.

Wu Kan, head of equity trading at Shanshan Finance, attributed Friday’s weakness to some investors taking profit after robust gains recently in certain sectors such as metal, but argued the correction helps gather further upward momentum. “Market sentiment remains optimistic and the upward trend is not yet broken,” Wu said.

“The upcoming National People’s Congress, and the first-quarter earnings season will keep investors excited.” Reflecting rising risk appetite, China’s outstanding margin loans have risen for four consecutive days to exceed 900 billion yuan ($131.07 billion), as investors appear more willing to use borrowed money to buy stocks. Small-caps outperformed blue-chips on Friday morning, with Shenzhen’s growth board ChiNext rising 0.5 percent.

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Banking stocks fell 0.3 percent, as news of Guo Shuqing, governor of China’s eastern Shandong province, becoming China’s new top banking regulator brings uncertainty to a sector facing increasing deleveraging pressure. In Hong Kong, the Hang Seng index dropped 0.4 percent to 24,031.23, while the Hong Kong China Enterprises Index lost 0.7 percent to 10,450.87. The indexes are poised to end the week roughly flat. Most sectors fell, with resources and energy shares leading the decline.

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