HONG KONG: Mainland stocks continued to fall on Tuesday, dropping for the seventh trading day in a row – the longest losing streak in more than three years – as investors continued to fret over further government tightening of leverage trading. The Shanghai Composite Index (CSI) was down 1 point at the end of Tuesday’s morning session, closing at 3,077.7, while the CSI 300 – which tracks the large caps listed in Shanghai and Shenzhen – was down 0.27 to 3,349.8. However, stocks in Shenzhen reversed their four-day loss to tick up, with the Shenzhen Component index adding 0.14 per cent to trade at 9,847.1 while the Composite Index increasing 0.24 per cent to 1,839.9 while the Nasdaq style ChiNext was up 0.2 per cent to 1,791.6. The CSI’s losing streak comes as China has continued to underline its commitment to cleaning up financial markets and reducing leverage trading – tightening measures which seem to be working. The stricter rules have led to poorer performances by China’s banks listed in Hong Kong, with the sector leading morning losers. Bank of Communications dropping 0.9 per cent to HK$5.8 and China Construction Bank by 0.6 per cent to HK$6.2. ICBC, the world largest bank by assets, was also down 0.4 per cent to close at HK$5.0.
Hong Kong stocks as a whole traded higher for the second day, cautiously taking comfort from the victory of Emmanuel Macron in France’s presidential election. The Hang Seng Index closed for lunch up 0.4 per cent or 86.1 points at 24,664.0, while the Hang Seng China Enterprises index jumped 0.4 per cent or 42.6 points to 10,025. “Macron’s win has eased concerns on global markets, but the continuous weakness of Chinese mainland stocks has put pressure on Hong Kong markets,” said Li Ninng, an analyst with Victory Finance Group. “The city’s benchmark is expected to fluctuate between 23,800 and 24,800 points [in the coming days].”
In Hong Kong, internet-related companies had a strong morning’s trade. China’s second largest internet giant Tencent – the city’s most heavily traded stock – added 0.98 per cent to close at HK$247.2. Smartac Group China Holdings rallied 2.4 per cent to close at HK$0.13. Overnight, US stocks ended mainly flat on Monday, following a loss in European markets as investors had largely priced in the victory of Emmanuel Macron in France’s presidential election. The S&P 500 closed unchanged at 2,399.4. The Dow Jones Industrial Average benchmark climbed to the best close the previous trading day since early March, adding slightly more than 5 points to 21,012.3. The Nasdaq Composite added 2 points to close at 6,102.7. In afternoon Asian trading on Tuesday, Tokyo’s Nikkei 225 was 0.1 per cent lower at 19,867.1, and Sydney’s S&P/ASX 200, 0.3 per cent lower at 5,882.3. Hong Kong stocks listed in the US as American Depository Receipts (ADRs) closed mixed compared with their Hong Kong counterparts after conversion into the local currency. China Unicom’s ADR ended 0.5 per cent higher at HK$10.1, compared with its Hong Kong close of HK$9.9, and China Petroleum & Chemical Corp ended 0.6 per cent higher at HK$6.1. China Southern Airlines added 0.7 per cent to HK$23.0.
