HONG KONG (Nikkei Markets) -- Hong Kong stocks tumbled on Thursday, trimming their 10th monthly advance of 2017, as Tencent Holdings slumped after rallying to a string of record-highs earlier in November.
The Hang Seng Index sank 1.5% to 29,177.35, paring its gains for the month to 3.3%. The gauge has risen every month this year except September amid an upbeat global equities outlook, improved corporate earnings and sustained inflows from Chinese investors through the stock-exchange links connecting the city with Shanghai and Shenzhen.
On Thursday, Tencent slid 3.3%, life insurer AIA Group gave up 4% and Ping An Insurance Group retreated 3.8%, as investors appeared to continue taking profits. Each of the three stocks had hit all-time highs earlier in the month. The day's losses for Tencent came after an overnight sell-off in technology shares on Wall Street.
Despite its decline on Thursday, Tencent was among November's best performers on the Hang Seng Index, with a gain of nearly 14%. The internet major, which has the highest weighting on the gauge, is also the most valuable stock listed in Hong Kong, with a market capitalization of about 3.78 trillion Hong Kong dollars ($484 billion). Ping An shares climbed 12.4% in November, while AIA was up about 7.8% for the month.
The heavyweight shares of Tencent, AIA and Ping An were still "adjusting" after reaching record highs recently, said Francis Lun, chief executive at GEO Securities. While the Hang Seng Index was expected to end the year above 30,000, its performance continues to depend on Tencent, he said.
Shares of mainland Chinese companies listed in Hong Kong provided a contrast. While the Hang Seng China Enterprises Index also fell 1.5% on Thursday, it ended November 0.3% lower. The weakness stemmed from concerns about high credit costs in the mainland, which also dragged down Chinese equity markets. The yield on 10-year Chinese government bonds is currently near three-year highs, reflecting worries over efforts by authorities to reduce debt.
The Shanghai Composite Index finished November with a 2.2% loss after falling 0.6% on Thursday. The Shenzhen Composite Index, which gave up 0.9% on Thursday, tumbled 5% during the month.
An index of large property developers listed in Hong Kong climbed 1.3% in November, as investors appeared to shrug off rising interbank borrowing costs, to which most local mortgages are benchmarked. CK Asset Holdings rose 2.5% and Sino Land jumped 5.2% during the month, even though the U.S. Federal Reserve is expected to raise its policy rates at its meeting next month, according to the CME FedWatch tool.
Private-home prices in Hong Kong rose to a fresh record high in October as they climbed for a 19th straight month, recent government data showed.
David Ng, head of China and Hong Kong property research at Macquarie Research, said at a media briefing on Thursday that the brokerage company expects local property prices to rise 10% next year.
"The Hong Kong property market is no longer income-driven, but mortgage-driven and wealth-driven," Ng said. Hong Kong economic growth and U.S. rate hikes will have "very little impact" on local property prices, as long as there is "panic buying" by cash-rich parents on fear their children will not be able to afford housing in the future, he said.
Nearly HK$172 billion of stocks changed hands in heavy trading on the Hong Kong stock exchange's main board on Thursday. Thursday is the last trading day before MSCI, the index compiler whose benchmarks are tracked by money managers with trillions of dollars in assets, implements changes to its global indexes following a review.
Meanwhile, construction-materials distributer Hong Kong Shanghai Alliance Holdings shed 1.3% after reporting a loss of HK$25.2 million for the six months ended Sept. 30, compared with a profit a year earlier.
Foundation-works builder Wan Kei Group Holdings dropped 4.8% after swinging to a six-month net loss of about HK$26.37 million following a profit of HK$3.5 million in the year-earlier period.
Luk Fook Holdings (International) slid 2.4%, trimming year-to-date gains to 69%. The jewelry retailer on Wednesday reported a 21.3% increase in six-month net profit and a 14.9% rise in revenue.
Electronic-appliances maker Kenford Group Holdings slipped 0.8% after saying its net loss for the six months ended Sept. 30 widened to HK$9.65 million, while its revenue dropped 8.8%.
-- Amy Lam and Carrie Chen