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

Hong Kong stocks fall after two-week rally amid protests

CNOOC and PetroChina rise as crude prices jump while Cathay Pacific retreats

HONG KONG (Nikkei Markets) -- Hong Kong shares declined on Monday after a two-week winning streak, weighed down by concerns about the city's economic climate following anti-government demonstrations that spilled over into a 15th straight weekend.

The Hang Seng Index dropped 0.8% to 27,124.55. The gauge rose 2.5% last week, completing a second consecutive weekly advance. Heavyweights China Construction Bank and Tencent Holdings shed 1.9% and 0.9%, respectively.

Yixin Group, the operator of an online automobile financing platform, surged 24% after Tencent and Hammer Capital offered to buy shares in U.S.-listed Chinese advertising company Bitauto Holdings that they don't already own. Bitauto has a controlling stake in Yixin.

Hong Kong Exchanges & Clearing declined 2.4% after the London Stock Exchange Group on Friday rejected its 29.6 billion pound ($37 billion) acquisition bid. HKEX said it plans to continue engaging with LSEG shareholders.

Sentiment was weak after violent protests on Sunday marked a 15th consecutive weekend of political unrest in Hong Kong. More than 10 days after the city's Chief Executive Carrie Lam announced the withdrawal of a controversial extradition bill that have sparked protests since June, activists continue to stage demonstrations as four of their five demands remain unmet.

"Local political issues showed signs of escalation over the past weekend," said Louie Shum, chief executive at Sincere Securities. Meanwhile, "the market has already priced in Sino-American trade talks. Unless there is something certain and concrete," people are not expecting much, he added.

Chinese pork producer WH Group rose 0.5% after Beijing said on Friday that it would cancel additional tariffs on imports of pork and soybeans from the U.S. WH Group, which has significant business interests in the U.S., has been caught in the crosshairs of the Sino-American trade war that started early last year. Shares of WH Group shed 31.6% in 2018.

China's reconciliatory move on Friday was the latest in a series of indications that tensions between the U.S. and China are easing ahead of trade talks in October. Last week, U.S. President Donald Trump said he was postponing the imposition of a 5% additional tariff on Chinese goods by two weeks, while China released a list of U.S. goods that would be exempt from a 25% extra import tariff that was imposed last year.

On the mainland, the Shanghai Composite Index ended little changed, while the yuan traded onshore strengthened 0.1% against the U.S. dollar to 7.0658.

Data released earlier on Monday showed China's industrial output rose 4.4% in August, slowing from July's 4.8% pace and falling short of the 5.2% growth analysts polled by Reuters were expecting. Retail sales in Asia's largest economy grew 7.5% last month. Analysts polled by Reuters were expecting a reading of 7.9%.

Meanwhile, the Hong Kong-listed shares of energy producers CNOOC and PetroChina jumped 7.4% and 4.3%, respectively, amid a surge in global oil prices after an attack on Saudi Arabia's oil infrastructure thwarted the country's oil production. Brent crude futures were last up 8.4% at $65.28 a barrel after jumping as much as 19.5% in early Asian trading.

The increase in global oil prices also weighed on airline stocks on Monday, with Air China shedding 4.6% in Hong Kong and China Southern Airlines declining 3.9%. Cathay Pacific Airways lost 4%.

China Mengniu Dairy slipped 2.3% after announcing an agreement to buy infant formula maker Bellamy's Australia for 1.46 billion Australian dollars ($1 billion).

-- 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