HONG KONG: Hong Kong shares were poised to snap their longest-ever winning streak on Thursday, amid region-wide caution over equity valuations after a strong rally.
The Hang Seng Index had shed 0.2% to hit 31,010.50 by the noon break, heading for its first loss in 13 trading days. Technology heavyweight Tencent Holdings fell 2.2%, moving further away from record highs touched earlier this week. London-headquartered lender HSBC Holdings climbed 2% amid rising U.S. Treasury yields.
Thursday’s drop came alongside broad declines in the rest of Asia and pulled the Hang Seng back from recent 10-year highs. The Nikkei Asia300 Index fell 0.6% after U.S. equity indexes came off record highs overnight, with the S&P 500 Index and the technology-heavy Nasdaq Composite snapping six-day rallies. The yield on the 10-year U.S. Treasury note rose to a 10-month high. Chinese officials have recommended slowing or halting purchases of U.S. government bonds, Bloomberg reported, citing people familiar with the matter.
“The market needs a correction after a 12-day rally as most of the indexes have been overbought,” said Andy Kwan, director of ACE Centre for Business and Economic Research in Hong Kong. “But the correction won’t be much, as strong southbound inflows are still focused on heavyweights such as HSBC and Tencent.”
He expects the city’s main gauge to drop back to 30,800 in the short term.
The Shanghai Composite was down 0.2% at noon, heading for its first decline in 10 days, while its Shenzhen counterpart lost 0.1%. China’s 10-year government bond yield was at 3.964% after closing at 3.93% on Wednesday while the onshore traded yuan edged 0.2% lower at 6.5155.
China Overseas Land & Investment slipped 0.2% in Hong Kong, trimming year-to-date gains to 15.5%. The developer’s annual contracted property sales rose 10.2% on year in 2017, it said late on Wednesday. Greenland Hong Kong Holdings, a unit of Chinese developer Greenland Holdings, slid 3.6% despite reporting a 65% jump in 2017 contracted sales.
China State Construction International Holdings rose 2.4% after saying the accumulated value of its new contracts for 2017 stood at HK$103.1 billion ($13.2 billion), beating its target of at least HK$100 billion. For 2018, the construction contractor is targeting new contracts of at least HK$115 billion.
China Sanjiang Fine Chemicals climbed 1.7% after saying it expects 2017 net profit to rise more than 80% from a year earlier.
On Time Logistics Holdings said it expects to record a very substantial increase in revenue and net profit for 2017. Trading in the company’s shares has been halted since Dec. 1.
