HONG KONG (NewsRise) -- Hong Kong shares fell for a fourth day Tuesday as investors braced for Donald Trump's address to U.S. lawmakers, slowing the index's second consecutive monthly advance.
The Hang Seng Index slipped 0.8% to 23,740.73, a two-week low, with AAC Technologies Holdings and AIA Group leading losses. The gauge still ended February 1.6% higher, driven by a rally in mainland companies on a steady yuan, a stabilizing economy and improving flows from across the border. The Hang Seng China Enterprises index, down 0.3% today, jumped 5% in February for its best monthly performance since August. The Shanghai Composite lagged H-shares this month with a 2.6% advance. It ended 0.4% higher Tuesday.
"One of the main reasons for the rally in H-shares is inflows from China and the relatively inexpensive valuations as compared to their mainland counterparts," said Ronald Wan, chief executive at Partners Capital International. "The macro data out of China has been decent, and the lessening of depreciation pressures on the yuan is also helping."
The monthly gains in Hong Kong come after indexes on Wall Street soared to record highs repeatedly in February as Trump's promise of upcoming tax reforms shifted focus from his protectionist policies to his fiscal spending plans. While the president this week said a "big" boost to infrastructure spending was in the offing, investors appeared to be waiting for the plans to put into action.
"Unless an actual bill has been drafted and submitted to legislative process, it doesn't count as an actual policy proposal," Johan Jooste, chief investment officer at Bank of Singapore wrote in a note. "For the time being, we remain in the "not so bad" scenario - our base case. As expected, delivery has lagged rhetoric and clarity remains lacking."
Bank of China (BOC) and China Construction Bank (CCB) rallied at least 10% each this month after data showed a surge in both aggregate financing and new yuan loans made in January. Optimism that bad debts may have stabilized as the economy improves also supported lenders.
China Resources Land surged 9.6% and China Overseas Land & Investment added more than 4% this month, helped by positive brokerage reports. Analysts say stocks have already factored in the government's attempt to cool property prices over the last few months.
Belle International Holdings was among the top performers this month, with its over 12% rally receiving a boost after Credit Suisse upgraded the stock on a positive outlook.
New World Development climbed almost 10% in February, with a majority of the gains coming after the company reported upbeat earnings growth for the six months to Dec. 31.
Among the major losers, HSBC Holdings fell 6.4% this month on disappointing earnings, while Lenovo Group fell almost 9% after the personal computer and smartphone maker reported a 67% plunge in third-quarter net profit.
Sands China slipped a little more than 6% in February despite Tuesday's 1% advance. The stock was weighed down by a decline in net profit for the December quarter and missed expectations in January's Macau gaming revenue growth. February's data is due this week. Its peer Galaxy Entertainment Group rose 0.3% on Tuesday before it reported a 51% jump in 2016 net profit at the end of the day's trading.
Sun Hung Kai Properties fell 1.1% to HK$113.50 Tuesday. After markets closed, the company reported a 40% increase in net profit for the six months ended Dec. 31 to HK$20.66 billion ($2.66 billion).
The onshore traded yuan was little changed against the dollar at 6.8696.The Nikkei Asia300 Index, which tracks 324 companies across the region, was down 0.2% at 1,228.52.
-V.Phani Kumar and Nimesh Vora