January 12, 2017 7:06 pm JST

Caution over Trump stimulus stalls Hong Kong share rally

HONG KONG (NewsRise) -- Hong Kong stocks halted their longest rising streak in almost six months on concern the market may have run up too much too quickly and as Donald Trump avoided detailing his fiscal stimulus plans.

The Hang Seng Index retreated 0.5% to 22,829.02, its biggest drop in three weeks, after a five-day rally pushed it to two-month highs. Casino stocks were the top decliners as advances fueled by speculation of upbeat January gaming revenue lost steam, with Galaxy Entertainment Group and Sands China sliding 2.2% or more. A gauge of local real estate companies fell for the first time this year, paced by a 1.9% retreat for Cheung Kong Property Holdings.

Trump, who will officially become the U.S. president on Jan. 20, provided few details of his fiscal and tax policy agenda at a press conference Wednesday, leading some market participants to question the recent optimism that had propelled American stocks, bond yields and dollar higher.

"Global markets will be cautious as we get closer to Trump's inauguration and investors may prefer to take money off the table," said Ronald Wan, chief executive at Partners Capital International. "For Hong Kong, a correction was overdue from the current overbought levels and as the index approached resistance near the 23,000 levels."

Mainland markets slipped as well, sending the Shanghai Composite 0.6% to a near two-week low as investors looked ahead to the weeklong Chinese New Year holidays starting later this month. The onshore yuan jumped 0.7% to 6.8864 to a U.S. dollar, as a gauge of the greenback's strength fell to a one-month low.

"Ahead of the Chinese New Year break, we may see further downside for China as well as Hong Kong markets," Wan added.

Rex Tillerson, Trump's nominee for secretary of state, told the U.S. Senate Foreign Relations Committee that China should be denied access to the islands it built in the South China Sea. The comments, which came after Trump said that the U.S. isn't necessarily bound by the One-China policy, could enrage policy makers in Beijing.

The yen rose more than 1% against the dollar, sending Japan's Nikkei 225 Index 1.2% lower. The Nikkei Asia300 index of some of the region's most influential companies was little changed at 1,071.66.

Morris Holdings, which priced its initial public offering at HK$1.05, surged on its debut to close the day at HK$1.40. Another debutant Jilin Jiutai Rural Commercial Bank climbed to HK$4.87 from its IPO at HK$4.56.

China Overseas Land & Investment climbed 1.1% to HK$22.65. The company reported contracted property sales of HK$3.9 billion ($502.9 million) in December after the market close on Wednesday.

Trading in the shares of China Vanke, among the nation's largest property developers by sales, was suspended in Hong Kong on Thursday at the company's request. Vanke said China Resources, a substantial shareholder in the company, was considering a major plan involving its stake.

People's Insurance Group of China fell 1% to HK$3.06. Its vice chairman Wang Yincheng was taken away as part of an investigation by authorities, according to a Caixin report citing sources.

-- V. Phani Kumar and Nimesh Vora

Asia300

China Overseas Land & Investment Ltd.

Hong Kong

Market(Ticker): HKG(688)
Sector:
Industry:
Finance
Real Estate Development
Market cap(USD): 31,832M
Shares: 10,956.2M
Asia300

China Vanke Co., Ltd.

China

Market(Ticker): HKG(2202)
Sector:
Industry:
Finance
Real Estate Development
Market cap(USD): 30,828.8M
Shares: 11,039.2M
Asia300

Galaxy Entertainment Group Ltd.

Hong Kong

Market(Ticker): HKG(27)
Sector:
Industry:
Consumer Services
Casinos/Gaming
Market cap(USD): 23,811.5M
Shares: 4,277.64M
Asia300

Cheung Kong Property Holdings Ltd.

Hong Kong

Market(Ticker): HKG(1113)
Sector:
Industry:
Finance
Real Estate Development
Market cap(USD): 26,936.6M
Shares: 3,755.03M

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