ArrowArtboardCreated with Sketch.Title ChevronCrossEye IconIcon FacebookIcon LinkedinShapeCreated with Sketch.Icon Mail ContactPath LayerIcon MailMenu BurgerIcon Opinion QuotePositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Nikkei Markets

Hong Kong stocks hit 14-month low as drugmakers, banks drop

ANTA slides on $5.4bn offer for Finnish owner of Wilson Sporting Goods

HONG KONG (Nikkei Markets) -- Hong Kong stocks fell to a 14-month low on Wednesday, with the equity benchmark slipping further into a bear market as trade tensions between the U.S. and China showed no signs of easing.

The Hang Seng Index dropped 0.3% to 26,345.04, capping its sixth straight loss, with mainland lenders and drugmakers among the notable decliners. The gauge entered a technical bear market on Tuesday as it closed more than 20% below an all-time high it reached in January.

Sino Biopharmaceutical tumbled 14.4%, leading percentage declines on the gauge, while CSPC Pharmaceutical Group slumped 9.7%. The losses came after Chinese Premier Li Keqiang said in a speech on Tuesday that the process of drug manufacturing should be more strictly overseen.

China Construction Bank and Industrial & Commercial Bank of China, both market heavyweights, shed 1.9% and 2%, respectively. The stocks are down 8.6% and 7.4% so far in September.

"Investors are very cautious in the trade war environment," said Stanley Chan, research director at Emperor Securities. "A new global trade order is building and we do not know how it will unfold. I do not expect China and the U.S. to reach a trade agreement soon. The depressed market conditions are likely to stay for a period before a rebound."

Concerns that China's economy could slow down at a quicker pace were weighing on mainland banking stocks, Chan said.

The Hang Seng Index's 14-day relative strength index, a measure of momentum, on Wednesday ended lower than 30 for the first time since June, dropping below a threshold that signals to some technical analysts that the gauge could be oversold.

Stocks listed in the city have been under mounting pressure as a trade battle between the U.S. and China heats up, with investors bracing for Washington's next move on proposed tariffs on goods imported from the Asian country. China has told the World Trade Organization it wants to impose $7 billion a year in sanctions on the U.S., in retaliation for Washington's noncompliance with a ruling on a dispute over American dumping duties initiated in 2013, Reuters reported on Tuesday.

The Shanghai Composite fell 0.3% to 2,656.11, its lowest close since January 2016. The yuan traded onshore was little changed against the U.S. dollar at 6.8622.

ANTA Sports Products plunged 9.2% after saying the company and private-equity company FountainVest Partners have made a takeover offer for Amer Sports, valuing the Finnish company at 4.66 billion euros ($5.4 billion). Amer Sports controls Wilson Sporting Goods, owner of the Wilson brand of tennis rackets.

CK Infrastructure Holdings added 1.9%. The Australian Competition and Consumer Commission on Wednesday approved the company's A$12.98 billion ($9.2 billion) takeover proposal for Australian gas pipeline operator APA Group.

Pork producer WH Group slid 1.9%. Smithfield Foods, a U.S. unit of the company, will shut its Tar Heel plant in North Carolina on Thursday and Friday due to Hurricane Florence, Reuters reported, citing a company spokeswoman.

Shopping mall operator Renhe Commercial Holdings rose 5% after saying it agreed to buy Harbin Dili Fresh Agricultural Produce Enterprise Management from controlling shareholder Dai Yongge. Renhe said it will pay 400 million yuan ($58.2 million) as a refundable deposit to Dai and the target company.

Building contractor Golden Ponder Holdings slumped 4.8% to 30 Hong Kong cents after saying the overallotment option for its initial public offering lapsed without the option being exercised. At its current price, the stock is down about 45% from its IPO price.

China Chengtong Development Group climbed 5.8% after saying it plans to sell the Cuidao Hotspring Hotel in Haikou in southern China, and its debt receivables, for a minimum consideration of 226 million yuan.

-- Amy Lam

You have {{numberReadArticles}} FREE ARTICLE{{numberReadArticles-plural}} left this month

Subscribe to get unlimited access to all articles.

Get unlimited access
NAR site on phone, device, tablet

{{sentenceStarter}} {{numberReadArticles}} free article{{numberReadArticles-plural}} this month

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

Benefit from in-depth journalism from trusted experts within Asia itself.

Try 3 months for $9

Offer ends September 30th

Your trial period has expired

You need a subscription to...

See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

See all offers
NAR on print phone, device, and tablet media