ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Nikkei Markets

Hong Kong shares extend weekly losses as tensions remain

WH Group leads weekly losses after earnings, while Sunny Optical jumps

HONG KONG (Nikkei Markets) -- Hong Kong shares rose on Friday, but ended lower for the week as worries over Sino-American trade tensions, political unrest in the city and a global growth slowdown weighed on investor sentiment.

The Hang Seng Index added 0.9% to closed at 25,734.22 on Friday. The gauge, however, declined 0.8% over the last five days, finishing its fourth consecutive weekly decline.

Pork producer WH Group shed 8.5% this week, the biggest percentage loser on the gauge, after reporting a 16.9% decrease in profit for the first half of the year. Sunny Optical Technology Group jumped 14.9% since last Friday following a 21.3% jump in net profit for the first half and a 30% increase in revenue. It also reported a 23% increase in July shipment volumes for handset lens and an 82.2% jump in shipments for handset camera modules.

On Friday, WH Group rose 2.7%, while Sunny Optical ended unchanged.

Ping An Insurance Group climbed 2.2% on Friday after reporting a 68.1% jump in net profit and a 17.2% increase in revenue during the first half of 2019. Meanwhile, pan-Asia insurer AIA Group rose 1.6%. The two stocks contributed nearly a third of the index's gains by points.

Global risk appetite waned this week after the yield on 10-year U.S. Treasury bonds fell below that of two-year notes for the first time since 2007. While the inversion, seen as signaling an upcoming recession, was brief, the yield on 10-year Treasury bonds fell further on Thursday, as investors continued to favor the safety of long-term U.S. debt.

Meanwhile, investors also continued to watch developments between the U.S. and China on trade. Beijing on Thursday vowed to retaliate against Washington's impending 10% tariffs on $300 billion of Chinese goods, calling the move a violation of accords between the two countries at a Group of 20 summit in Japan in June. Earlier this month, U.S. President Donald Trump unexpectedly announced plans to impose tariffs on more Chinese goods from September. The U.S. Trade Representative office has since said some of those goods will be spared from levies until Dec. 15.

"The Hang Seng Index has bottomed out," said Ivan Li, a director in CSL Securities' investment research department. "The gauge is at a very cheap valuation."

The local equity benchmark has shed 10.5% over the last four weeks, and is trading near its lowest levels since January.

While investors are not optimistic about the trade war, they are not as worried as they used to be, he added.

In Hong Kong, a series of demonstrations at the city's international airport earlier this week caused Airport Authority Hong Kong to cancel a number of flights on Monday and Tuesday. The demonstrations, which started peacefully in June to protest against a now-shelved controversial extradition bill, have turned violent more recently as police clash with activists.

In the mainland, the Shanghai Composite Index added 0.3% on Friday, while the yuan slipped 0.1% against the dollar to 7.0408.

China Resources Beer Holdings added 7.8% in Hong Kong after the company reported a 24.1% increase in first-half net profit.

Chinese brewer Tsingtao Brewery jumped 9.8% following a 25% increase in profit and 9% higher revenue for the first half.

Infant formula maker Ausnutria Dairy surged 13.9% as trading resumed following a day's halt, after the Chinese company "vigorously" denied allegations of financial irregularities made by short-seller Blue Orca Capital on Thursday. The stock had slumped 20% Thursday before trading was halted.

China Southern Airlines added 1.6% after reporting a 10.4% increase in passengers carried in July.

Air China rose 0.5% after saying passengers carried in July rose 6.9% from a year ago.

Handbag maker Best Food Holding tumbled 9.1% after saying it expects to report a "significant increase" in net loss for the first half of the year.

-- Benny Kung

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media