HONG KONG: Hong Kong stocks have fallen on concerns China’s devaluation of the yuan could hurt local companies, while Shanghai gained on Beijing’s pledge to keep supporting equities.
The benchmark Hang Seng Index on Monday lost 0.74 per cent, or 176.38 points, to end the day at 23,814.65 on turnover of $HK65.77 billion ($A11.50 billion).
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Hong Kong shares were hit by concerns the cheaper yuan will affect local companies after China cut the value of its daily reference rate against the US dollar by a record 4.4 per cent last week.
Property companies with high amounts of US dollar debt, now more expensive to service, were hurt, including top developer Vanke, which fell 3.09 per cent to $HK18.18 despite reporting a pick up in first-half earnings.
Analysts said the impact of the weaker yuan could be exacerbated if the US raises interest rates, expected as early as next month, which would drag up the greenback-pegged Hong Kong US dollar.
Chinese companies trading in Hong Kong, as measured by the MSCI Index, are already far more expensive than their mainland counterparts after a recent rout in Shanghai equities.
“In the longer run, the Chinese companies will outperform,” Herald van der Linde, Hong Kong based head of Asia-Pacific equity strategy at HSBC, told Bloomberg News.
Shares in Tianjin Port sank 13.04 per cent to $HK1.40, their biggest loss since 2009, as fears mounted that hundreds of tonnes of cyanide released by deadly blasts last week could hamper shipments long-term.
