HONG KONG: Hong Kong stocks fluctuated on Thursday morning following gains on Wall Street as the US Federal Reserve announced its decision to stick to current interest rates and better than expected economic data from China and Europe. But uncertainty remained over US President Donald Trump’s economic policies, hindering the share performances both at home and abroad. The Hang Seng Index closed the morning lower by more than half a per cent to 23,170 while the Hang Seng China Enterprises index lost 0.64 per cent to 9,694 after higher openings for both benchmark indexes Thursday morning.
Chinese mainland markets are closed for Lunar New Year holidays and will resume trade on Friday. With the Fed’s decision to hold interset rates in its first meeting after Trump took office on Wednesday, shares in Hong Kong’s property sector were still down due to fears over a possible Fed rate hike in March, according to Castor Pang Wai-sen, head of research at Core Pacific Yamaichi. “With Trump promising more funding into infrastructures the risk of a higher inflation will loom,” he said, “and the Fed policymakers would take that into consideration when thinking of their next move.” He said the Fed might wait until the US president makes his economic policies clearer.
Property stocks were among the biggest losers on the Hong Kong bourse as mainland developer China Resources Land led the losses, dropping 2.24 per cent to HK$ 19.16, while a major Hong Kong developer Sino Land saw its shares lose 2.0 per cent to HK$12.78. The mainland developer has recently posted 27 per cent rise from a year ago in its sales volume for 2016. Shares in Shougang Resources also dropped 2.0 per cent to HK$1.48 in morning trading after reports the company was linked to missing mainland Chinese tycoon Xiao Jianhua, who was reportedly to have been taken back by mainland police force to assist with anti-graft probes.
China Strategic Holdings, another company reported to have been linked with Xiao, also saw its shares lose 1.89 per cent to trade at HK$ 0.16 on Thursday. Xiao doesn’t own any shares in Strategic Holdings “at the moment,” the company’s executive director Chow Kam-wah said by telephone in response to the South China Morning Post’s query. AAC Technologies led the gains by adding 1.47 per cent to HK$79.05, while Chinese dairy company Mengniu Dairy gained 2.65 per cent to HK$14.7. Shares in the insurance sector lost ground during the morning session, with China Life dropping 1.40 per cent to HK$21.15 and one of the major mainland insurers PICC Group losing 0.66 per cent to HK$ 3.01. In other Asian trading on Thursday morning, the Nikkei 225 in Tokyo lost 40 points, down 0.2 per cent to stay at 19,108, while the Kospi in South Korea was up 0.2 per cent to stay at 2,085.
