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 weighed by protests and trade war woes

Cathay slides as regulator restricts crew movements due to protest links

  © Reuters

HONG KONG (Nikkei Markets) -- Hong Kong shares edged lower after a choppy trading day on Monday amid heightened caution over protests in the city and U.S.-China trade war tensions.

The Hang Seng Index fell 0.4% to 25,824.72 after changing direction at least seven times. HSBC Holdings fell 1.6%. The London-headquartered lender's Greater China CEO Helen Wong is resigning to pursue a job at another company. Wong's departure follows an announcement by the bank earlier in the week that Global Chief Executive John Flint would be stepping down from his position.

Sunny Optical Technology Group added 3.6% after reporting a 23% increase in July shipment volumes for handset lenses and an 82.2% jump in shipments for handset cameras.

Cathay Pacific Airways slid 4.9% to HK$9.80, its lowest closing level since June 2009, while Swire Pacific slumped 6.2%. The Civil Aviation Administration of China on Friday barred some of Cathay's crew who had joined or supported protests in Hong Kong from working on any flight services to the mainland. The regulator also asked the airline to submit a list of crew members for approval starting Aug. 11, for all flights to and from the mainland and any that cross Chinese airspace.

"Not only is this likely to affect direct China flights, but also flights to Europe and, to a lesser extent, to the U.S., given they fly over China airspace," Jefferies analyst Andrew Lee, wrote in a note.

He said the CAAC flight safety warning added to the near-term headwinds facing the airline.

Swire Pacific is Cathay's single largest shareholder, with a 45% interest in the company, according to Refinitiv.

Trading volumes in the city were weaker than usual, with shares worth about 58.78 billion Hong Kong dollars ($7.49 billion) changing hands.

Protests in Hong Kong continued for the 10th straight weekend, with demonstrations again turning violent on Saturday and Sunday, as police fired tear gas in the streets and in a train station to clear crowds.

Activists continue to demand that the government withdraw its controversial extradition bill, conduct an independent investigation into the police's use of force during the demonstrations and implement universal suffrage.

Meanwhile, trade tensions between the U.S. and China showed few signs of easing after U.S. President Donald Trump on Friday said the U.S. was not ready to make a deal. A round of trade talks is expected to take place in Washington early in September. Trump suggested the meeting might not take place.

"With political instability in Hong Kong, people worry economic development will slow down, while the trade has been escalating," said Banny Lam, managing director and head of research at investment corporation CEB International. "We are not hearing good news from either side. It seems there is no way out of the stalemate."

Many markets in Asia, including Singapore, Malaysia and India, were closed for local holidays on Monday. The Nikkei Asia300 Index edged 0.3% higher.

On the mainland, the Shanghai Composite Index added 1.5%, while the yuan slipped 0.1% against the dollar to 7.0685.

China Evergrande Group declined 2.2% after the mainland property developer said it expected to report a decline in profit of about 49% for the first half to about 27 billion yuan ($3.82 billion).

NVC Lighting Holding jumped 57.1% after the company announced plans to declare a special dividend, following the sale of a stake in its China lighting business.

Drilling-equipment maker Hilong Holding climbed 10% after saying it expected to report a more than 90% jump in profit for the first half of the year.

Handset maker FIH Mobile rose 1% after saying it expected its net loss for the January-to-June period to narrow to $84.08 million.

--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 June 30th

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