HONG KONG: Hong Kong stocks lost hold of a mildly positive open to trade lower Wednesday morning, as investors took a cautious stance after the People’s Bank of China (PBOC) said in its quarterly policy report that it would maintain its “steady monetary policy” and create a “neutral and moderate” financial environment for China’s economic restructuring.
The Hang Seng Index HSI, -0.88% was down 0.5%. The biggest drag was banking major HSBC Holdings PLC 0005, -2.30% HBSC HSBA, -2.10% — which carries a more than 12% weighting on the Hang Seng — extended its weakness from the previous session after a report on alleged tax evasion at its Swiss unit. Shares of HSBC were down 1.3%, while fellow London-based lender Standard Chartered PLC 2888, -2.17% STAN, -2.55% also lost 2.1%. However, mainland Chinese banks posted broad increases, even as the PBOC report appeared to limit the gains: China Merchants Bank Co. 3968, +0.23% CIHHF, -4.82% 600036, -0.34% and Bank of Communications Co. 3328, -0.16% BKFCF, +16.90% 601328, -0.33% advanced 0.8% each, Agricultural Bank of China Ltd. 1288, -0.26% ACGBF, +2.78% 601288, -0.31% rose 0.6%, Agricultural Bank of China Ltd. 1288, -0.26% ACGBF, +2.78% 601288, -0.31% added 0.4%, and China Construction Bank Corp. 0939, -0.64% CICHF, -0.60% 601939, -0.72% edged 0.2% higher. In other sectors, China Railway Group Ltd. 0390, -2.46% 601390, +4.67% CRWOF, -2.50% dropped 2.5% after news it planned to raise up to 12 billion yuan ($1.9 billion) through an A-share placement, though the company’s A-shares rose 3.4% in Shanghai. Chinese coal producer China Shenhua Energy Co. 1088, -1.69% CUAEF, +6.02% 601088, +0.27% fell 0.5% after reporting its net profit slid 20% last year. Domestic competitor Yanzhou Coal Mining Co. 1171, -0.16% also dropped 1.1%. Over on the mainland, the Shanghai Composite Index SHCOMP, +0.23% sat flat after a two-day winning streak.
