HONG KONG: Hong Kong stocks turned volatile Thursday morning after HSBC’s preliminary China manufacturing index for the current month printed weaker than expected. The Hang Seng Index HSI, -0.04% opened down 0.3%, extended the deficit to 0.7% after the data, and then crawled back to a 0.3% loss. The mainland-China-tracking Hang Seng China Enterprises Index HSCEI, -0.38% was down 0.4%, while on the mainland itself, the Shanghai Composite Index SHCOMP, +1.12% shed brief post-data losses to sit 0.6% higher. HSBC’s “flash” China manufacturing Purchasing Managers’ Index rose slightly to 49.1 in May from a final read of 48.9 in April, data showed 15 minutes after the Hong Kong markets opened. The result missed a forecast 49.3 reading from a survey by Reuters. In Hong Kong, Chinese banks underperformed, with China Citic Bank Corp. 0998, -0.59% CHBJF, -7.26% 601998, -0.27% down 1%, Bank of Communications Co. 3328, -0.66% BKFCF, +0.52% 601328, -0.15% off 0.8%, and Agricultural Bank of China Ltd. 1288, -0.47% ACGBF, +8.26% 601288, -0.27% lower by 0.7%. Top-weighted Hang Seng Index component HSBC was down 0.6% as the stock traded ex-dividend. Meanwhile, some Chinese property stocks also suffered, as Evergrande Real Estate Group Ltd. 3333, -1.68% EGRNF, +7.32% slid 3.7%, Sino-Ocean Land Holdings Ltd. 3377, -1.74% SIOLF, +7.27% dropped 2.3%, and index component China Overseas Land & Investment Ltd. 0688, -0.17% CAOVF, -1.45% shed 1.1%. State-owned mobile carriers China Unicom Hong Kong Ltd. 0762, -3.43% CHU, -0.39% and China Telecom Corp. 0728, -2.72% CHA, -1.62% fell 2.9% and 2.4%, respectively, after China’s State Council unveiled guidelines Wednesday on building a nationwide high-speed Internet network and lowering data charges, and a state-media editorial saying the key to initiative is to “dismantle monopolies.” China’s biggest telecom service operator China Mobile Ltd. 0941, +0.87% CHL, -1.82% however, rose 1.1% after choppy early trade, and some telecom-equipment shares rallied to support the gains in Shanghai.
