HONG KONG: Hong Kong stocks started the second half of the year on a weak note, opening the morning session on Monday lower while mainland Chinese markets also trended down. The Hang Seng Index was down 0.13 per cent, or 32.24 points, at 25,732.34 as trading got under way, and the Hang Seng China Enterprises index dropped 0.04 per cent, or 4.39 points, to 10,360.83. Most banks retreated after gains in previous sessions, although HSBC gained 1.31 per cent to HK$73.6. Local lender Hang Seng Bank lost 0.06 per cent to HK$163.20, while Bank of East Asia dropped 0.45 per cent to HK$33.40.
Chinese online major Tencent lost 0.29 per cent to HK$278.40, following last week’s decline in technology shares. The Bond Connect programme which allows Hong Kong investors to trade in China’s fixed income markets kicked off this morning with more than 3 billion yuan worth of mainland Chinese debt purchased by international investors. Benchmark indices on the mainland opened lower on Monday. The Shanghai Composite Index was down 0.16 per cent, or 5.07 points, to 3,187.36 while the CSI 300 — which tracks the large caps listed in Shanghai and Shenzhen — dropped 0.24 per cent, or 8.94 points, to 3,657.61. The Shenzhen Composite Index lost 0.17 per cent, or 17.84 points, to 10,529.61. Chinese manufacturing was stronger than forecast last month, according to a key index released on Monday morning.
The China Caxin manufacturing PMI for June stood at 50.4, better than the 49.8 estimated by economists and the 49.6 a month earlier. The official manufacturing PMI, announced on Friday, also recorded a better than expected performance. The People’s Bank of China on Monday set the yuan reference rate at 6.7772 per dollar prior to market open, compared to Friday’s 6.7744. All three major US indices logged strong gains in the first half of the year, with the Dow Jones rising 8 per cent, the S&P 500 up 8.2 per cent and the Nasdaq soaring 14 per cent, its best six-month performance since 2009. The rally in Wall street was partly due to the rebound in oil and bank stocks and a strong performance in the large-cap technology stocks despite a recent downturn.
US markets will close early on Monday and remain closed on Tuesday for the July 4 Independence Day holiday. Other global markets will operate a normal schedule, though trading volumes are expected to be lower. In Asian trading on Monday morning, Japan’s Nikkei 225 gained 0.08 per cent and South Korea’s Kospi increased 0.05 per cent. Almost all Hong Kong-listed companies with American Depository Receipts (ADRs) traded in the US closed slightly lower than their equivalent Hong Kong closing prices on Friday after conversion into the local currency. HSBC’s ADR closed at HK$72.20, down from the HK$72.65 seen at the Hong Kong close, Sinopec’s ADR rose from HK$6.09 to HK$6.12 while China Mobile decreased from HK$82.85 to HK$82.63.
