BEIJING: Hong Kong stocks headed for their biggest loss in a month as investors weighed declining earnings from Tsingtao Brewery Co. to Jiangxi Copper Co. and UBS Group AG cut its forecast for the nation’s growth.
The Hang Seng China Enterprises Index retreated 1.3 percent to 10,574.17 at 1:16 p.m local time. Tsingtao Brewery and Jiangxi Copper sank more than 2 percent, leading losses on the gauge. The Shanghai Composite Index dropped 0.6 percent to 3,414.52. Of the 88 companies tracked by Bloomberg that have so far reported third-quarter figures and are members of the Shanghai measure, 69 percent have missed estimates.
“Earnings are looking pretty bad, particularly companies in traditional industries,” said Wang Zheng, the Shanghai-based chief investment officer at Jingxi Investment Management Co. He’s keeping his holdings unchanged. “There won’t be any pickup in earnings through the year, so investors have been focusing on thematic investment on smaller companies.”
UBS lowered its forecast for China’s 2016 economic growth to 6.2 percent from 6.5 percent, while the Westpac-MNI China Consumer Sentiment Indicator showed confidence in the economy sank to a record low this month. The Shanghai Composite has rebounded 12 percent in October, after four straight months of losses, as investors lifted leveraged bets to a two-month high and the government cut borrowing costs to bolster the economy.
