August 10, 2017 2:21 pm JST

Hong Kong stocks hit by US - North Korea tensions as heavyweights fall

HONG KONG (Nikkei Markets) -- Hong Kong shares were on course for this year's worst day on elevated geopolitical tensions after North Korea said it is considering launching intermediate missiles into waters near the U.S. territory of Guam.

North Korea will develop a plan by mid-August for launching missiles to fall 30 to 40 kilometers away from Guam in the Pacific Ocean, the nation's state media reported Thursday. U.S. Secretary of State Rex Tillerson said Wednesday the Asian country posed no "imminent threat," several hours after U.S. President Donald said further threats from the North would be met with "fire and fury."

The Hang Seng Index shed 1.6% to 27,315.13 by midday, heading lower for a second day. Forty-one of its 49 active constituents retreated, with heavyweight lenders HSBC Holdings and China Construction Bank (CCB) sliding at least 2%, internet giant Tencent Holdings losing 1.5% and insurer AIA Group shedding 1.2%. The Hong Kong gauge is still up more than 24% this year, among the best-performing benchmarks in the region.

"For the moment, I think this is due to the geopolitical risk. There is a lot of uncertainty," said Banny Lam, head of research at CEB International Investment. "Investors are looking for an excuse for a correction."

The Hang Seng China Enterprises Index of large mainland companies in the city gave up 2%, while the Shanghai Composite skidded 1.1% in mainland trading, set for its steepest drop in more than three weeks.

Other Asian markets also pulled back after U.S. indexes edged lower overnight. The Nikkei Asia300 Index of some of the region's most influential companies slumped 1.2%.

Wharf Holdings, controlled by conglomerate Wheelock, tumbled 7.2% to emerge as the day's biggest decliner on the Hang Seng Index. Nomura downgraded it to neutral from buy, saying the stock likely had limited upside after a 14% rally the previous day, when the property investor announced plans to demerge certain property assets into a separately listed company.

China Mobile lost 0.5% to HK$84.20 in Hong Kong trading. During the noon break, the mobile services giant reported its half-yearly earnings climbed 3.5% from a year earlier to 62.7 billion yuan ($8 billion). It also announced an interim dividend of HK$1.623 a share and a special dividend of HK$3.20 a share.

Hong Kong rail operator MTR and telecommunications major PCCW are among other companies due to report earnings later Thursday. HKT, in which PCCW owns a majority stake, was little changed a day after reporting a 3% increase in half-yearly profit for the group. MTR was down 0.5%.

Wanda Hotel Development surged 28% after announcing plans to buy assets worth more than $1 billion from companies controlled by its billionaire founder Wang Jianlin. Trading in Wanda's shares was halted on Wednesday.

China Investments Holdings jumped 14% after saying it expects a "significant increase" in first-half profit.

Pax Global Technology fell 6% following a 14% drop in first-half profit even as its revenue rose 21%.

Hi Sun Technology China slid 4.7% amid broader market losses. The payment-processing-solution provider on Wednesday reported a 75% jump in half-yearly profit.

Hypermarket chain Sun Art Retail Group added 4.8% following a 23% increase in first half profit.

-- Suzannah Benjamin and V. Phani Kumar

Asia300

China Construction Bank Corp.

China

Market(Ticker): HKG(939)
Sector:
Industry:
Finance
Major Banks
Market cap(USD): 223,945.29M
Shares: 250,010.98M
Asia300

Tencent Holdings Ltd.

China

Market(Ticker): HKG(700)
Sector:
Industry:
Technology Services
Internet Software/Services
Market cap(USD): 425,565.93M
Shares: 9,498.88M
Asia300

AIA Group Ltd.

Hong Kong

Market(Ticker): HKG(1299)
Sector:
Industry:
Finance
Life/Health Insurance
Market cap(USD): 93,149.26M
Shares: 12,074.24M
Asia300

Wheelock & Co. Ltd.

Hong Kong

Market(Ticker): HKG(20)
Sector:
Industry:
Finance
Real Estate Development
Market cap(USD): 14,567.63M
Shares: 2,040.84M
Asia300

China Mobile Ltd.

Hong Kong

Market(Ticker): HKG(941)
Sector:
Industry:
Communications
Wireless Telecommunications
Market cap(USD): 208,079.98M
Shares: 20,475.48M
Asia300

MTR Corp. Ltd.

Hong Kong

Market(Ticker): HKG(66)
Sector:
Industry:
Transportation
Railroads
Market cap(USD): 34,673.07M
Shares: 6,005.85M
Asia300

PCCW Ltd.

Hong Kong

Market(Ticker): HKG(8)
Sector:
Industry:
Communications
Major Telecommunications
Market cap(USD): 4,273.69M
Shares: 7,719.63M

Get Insights on Asia In Your Inbox

To read the full story, Subscribe or Log in

Get your first month for $0.99

Redeemable only through the Subscribe button below

Once subscribed, you can…

  • Read all stories with unlimited access
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

Resubscribe now to continue reading.
BEST OFFER:
Only US$ 9.99 per month for a full-year subscription

To read the full story, Subscribe or Log in

Once subscribed, you can…

  • Read all stories with unlimited access
  • Use our smartphone and tablet apps

To read the full story, Subscribe or Log in

3 months for $9
SUBSCRIBE TODAY

Take advantage of this limited offer.
Subscribe now to get unlimited access to all articles.

To read the full story, Update your account

We could not renew your subscription.
You need to update your payment information.