HONG KONG: Hong Kong stocks capped a weekly drop ahead of the release of U.S. jobs data and Italy’s weekend referendum. Casino companies led declines on the index, while technology shares retreated following a plunge in the U.S.
The Hang Seng Index fell 1.4 percent at the close, with casino operators Galaxy Entertainment Group Ltd. and Sands China Ltd. sinking more than 3.9 percent. Macau may require inbound travelers to disclose cash holdings of over 120,000 patacas ($15,000) at entry, Teledifusão de Macau reported. Tencent Holdings Ltd. closed at the lowest price since Aug. 12. Investors are waiting for U.S. jobs data, the last report before the Federal Reserve meets this month, while Italy will vote on constitutional reform over the weekend.
“Investors are trying to be risk-off right now — the market momentum is not strong,” said Castor Pang, head of research at Core-Pacific Yamaichi in Hong Kong. The report of Macau’s cash disclosure rules is raising concern that “it will hurt casinos’ VIP business so share prices are falling even though they announced better than expected revenues.”
Hong Kong’s benchmark index is headed for a quarterly decline, with the city’s developers tumbling after the government announced a higher stamp duty to curb prices, and amid expectations the Fed will raise interest rates this month. With the city’s dollar pegged to the greenback, borrowing costs track those of the U.S.
Tencent dropped 1.8 percent after the tech-heavy Nasdaq 100 Index slid 1.6 percent to a two-week low. Facebook Inc. fell 2.8 percent in Thursday’s session.
“That’s putting selling pressure on Tencent,” said Pang. “Tech stocks continue to be avoided by investors because it doesn’t look easy to break through their peak. Funds continue to flow out from tech stocks, putting pressure on them.”
Insurers and brokerages, which rallied last week, were the biggest decliners on the H-share measure this week. China Galaxy Securities Co. slumped 6.1 percent, while China Life Insurance Co. retreated 4.4 percent.
