Hong Kong stocks fall on North Korea worries as earnings buoy China Mobile
HONG KONG (Nikkei Markets) -- Hong Kong stocks fell the most in five weeks as investor appetite for risk assets weakened after North Korea detailed plans to launch missiles near the U.S. territory of Guam, further ratcheting up geopolitical tensions.
The benchmark Hang Seng Index sank 1.1% to 27,444, while a gauge of large Chinese companies traded in the city skidded 1.6%, the most since March. The Nikkei Asia300 Index of the region's most influential companies gave up 0.9%, while U.S. index futures pointed to a weaker opening Thursday, possibly extending a two-day losing streak on Wall Street.
North Korea will by mid-August develop a plan to launch ballistic missiles into waters near Guam, its official media said Thursday, even after U.S. President Donald Trump said earlier this week that further threats from the North would be met with "fire and fury."
"The war of words between Trump and North Korea has largely dictated the direction of the market for the past 24 hours," Hussein Sayed, chief market strategist at currency brokerage house FXTM, wrote in a note to clients. "I believe that real risks of missile attacks remain low, and investors should avoid emotional reactions," he added, while urging the need for caution.
Commodity-sector shares were among the notable decliners Thursday on concern over the outlook for metal prices. The Hong Kong-listed shares of Jiangxi Copper, Aluminum Corp. of China and China Molybdenum all slid at least 3.7%.
Bourse operator Hong Kong Exchanges & Clearing sank 4.3% in a second day of losses after releasing its interim earnings report. China Galaxy International downgraded the stock's rating to Hold on Thursday, citing limited upside for the shares, which are still up about 19% so far this year.
Property investor Wharf Holdings tumbled 7%, the most in almost six years, to give up some of its 14% post-earnings surge on Wednesday. Shares of its parent Wheelock, which also posted a double-digit percentage increase the previous day, fell 2.1%.
China Mobile defied the broad market after the mobile-services giant reported a 3.5% increase in half-yearly earnings during the midday break, and announced a special dividend of HK$3.20 a share. The stock climbed 2.8% to HK$87 at Thursday's close, its highest level since March.
Shares of MTR climbed 0.5% before the Hong Kong rail operator reported a 46% jump in first-half earnings to HK$7.48 billion ($956.9 million), aided by a 41% increase in revenue.
Meanwhile, PCCW closed 0.7% lower before the telecommunications major said its interim profit jumped 49% to HK$1.29 billion.
Logan Property Holdings climbed 5.4% to a record high after the developer announced, during Thursday's midday break, that its first-half profit soared 166% to 3.4 billion yuan ($510.5 million).
China Overseas Grand Oceans Group fell 3.2%, trimming its year-to-date gains to 67%. The company posted a 13% increase in interim earnings from a year earlier.
Giordano International advanced 2.3% after the apparel retailer posted a 20% increase in first-half profit. It increased its interim dividend by 20% to 15 Hong Kong cents.
Among other notable gainers, Wanda Hotel Development soared 20% on plans to acquire assets worth more than $1 billion from companies controlled by its billionaire founder Wang Jianlin.
China Investments Holdings jumped 14% on expectations for a "significant increase" in first-half profit.
Over in the mainland, the Shanghai Composite ended the day 0.4% lower, while the yuan gained 0.3% to 6.6527 against the U.S. dollar, poised for its strongest level in almost a year.
-- Suzannah Benjamin and V. Phani Kumar