Hong Kong stocks flat ahead of Fed rate call
HONG KONG (NewsRise) -- Hong Kong shares were little changed in a choppy trading session Wednesday morning before a key U.S. Federal Reserve rate decision, with energy producers weighed down by falling oil prices while property developers inched higher.
The Hang Seng Index slipped less than 0.1% to 23,815.03 by midday, recovering from a near 0.8% slide earlier. CNOOC and PetroChina each fell at least 0.5% after U.S. crude prices declined for a seventh straight session overnight. The benchmark U.S. oil contract was up 1.8%. A gauge of property developers listed in Hong Kong advanced 0.2%, with Wharf Holdings climbing 1.8%.
Cathay Pacific Airways added 0.9% ahead of its earnings announcement. During the break, the airline reported a narrower 2016 net loss of HK$575 million ($74 million) but it shares began to quickly tumble as trading resumed.
Local stocks pared declines in the morning after Chinese Premier Li Keqiang told a news conference that Beijing does not want to see a trade war with the U.S., and reiterated its stance that relations between the two countries hinge on adherence to the "One China" policy. Weak risk appetite ahead of the Federal Reserve's near-certain rate increase later Wednesday sparked losses on Wall Street overnight. The Nikkei Asia300 index was up less than 0.1% at 1,141.40.
"A bit of nervousness is expected prior to the Fed outcome," said Louis Tse, director at Hong Kong-based VC Brokerage. "Inflation is picking up and U.S. economic data overall continues to surprise positively. The concern for investors will be the Fed could signal a more aggressive stand for the remainder of the year."
A recent clutch of upbeat Chinese data has helped revive investor confidence in the health of Asia's largest economy. The Shanghai Composite edged 0.1% higher, taking gains for the week so far to 0.9%.
The onshore traded yuan was little changed at 6.9142 against the dollar, hovering close to a two-month low. The dollar index rose 0.4% overnight.
China Petroleum & Chemical (Sinopec) slipped 0.9% in Hong Kong. China will lower retail gasoline and diesel fuel prices by 85 yuan ($12.30) per ton from Wednesday, state media reported.
Cheung Kong Property Holdings, Cheung Kong Infrastructure Holdings and Power Assets Holdings, all controlled by billionaire Li Ka-shing, received a nod from shareholders on Tuesday to form a consortium to pursue the A$7.4 billion ($5.6 billion) purchase of Australia's Duet Group. Cheung Kong Infrastructure slipped 0.2% and Power Assets edged 0.1% lower midday. Cheung Kong Property added 0.3%. Mainland Chinese developer Agile Group Holdings jumped more than 7% after reporting a 64% jump in net income for last year.
China Life Insurance rose 0.4% after reporting premium income for January and February of 189.9 billion yuan.
Alibaba Pictures jumped 6% to HK$1.41 after saying late Tuesday that it signed a three-year deal with parent Alibaba Group Holding for the long-term co-development of operations including Alibaba Gaming, Alibaba Literature and video streaming service Youku Tudou. Alibaba Group Holding shares slipped 0.8% overnight in the U.S.
ZTE rose 3.9% after it appointed Yin Yimin as its new chairman with immediate effect, replacing Zhao Xianming. The leadership change comes days after the networking equipment-maker pled guilty to violating U.S. sanctions against Iran and North Korea and agree to pay almost $900 million in penalties.
Air China advanced 3.7% after saying the number of passengers carried in February rose 2.8% to almost 8 million. China Southern Airlines rose 5% after passenger traffic rose 6.8% last month.
--V. Phani Kumar and Nimesh Vora