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Hong Kong stocks start the week higher as property companies surge

Hong Kong stocks start the week higher as property companies surge

HONG KONG: Hong Kong stocks began the morning session on Monday higher following broad gains in the US last week, while mainland markets slipped.

The Hang Seng Index opened up 0.26 per cent, or 80.45 points, at 30,895.09 after notching up the best weekly gain since October with a ninth straight gain on Friday, while the Hang Seng China Enterprises Index rose 0.20 per cent, or 24.89 points, to 12,236.52.

The gains were not as big as some analysts had predicted.

“We expected the market to really rise strongly, but the Hong Kong market has been hit by a profit decrease today especially by the banks and insurance,” said Francis Lun, CEO of Geo Securities.

“It is the financials that are dragging the market down.” Despite a slower morning than forecast, it is likely the Hang Seng Index will hit a record high this week, Lun added, “but right now they are still digesting the profit taking sell-off.”

China Construction bank was down 0.9 per cent to HK$7.54, while HSBC dropped 0.74 per cent to HK$80.20 and Hang Seng Bank lost 0.77 per cent to HK$192.50.

Insurance stocks also slipped. Ping An lost 0.06 per cent to HK$82.20, while AIA fell 0.52 per cent to HK$67.10 and China Life dropped 1.01 per cent to HK$24.35.

Property companies were early winners. Chinese developer Country Garden Holdings gained 8.6 per cent to HK$17.64, continuing its rise from last week when it contributed the most to the Hang Seng Index. Evergrande jumped 4.7 per cent to HK$30.00, while China Overseas gained 4.8 per cent to HK$29.30.

Technology stocks had a mixed start to the week. Some tech firms rose, following the US gains, including Tencent which was up 0.46 per cent to HK$435.20.

Others tumbled in early morning trade. Apple supplier AAC Technologies dropped 4.32 per cent to HK$143.90, while Sunny Optical Technology (Group) fell 3.65 per cent to HK$103.00.

Mainland markets were mainly down at the beginning of the morning session. The Shanghai Composite Index slipped 0.04 per cent, or 1.18 points, to 3,390.57, having recorded its biggest weekly jump in more than a year last week. The CSI 300 – which tracks the large caps listed in Shanghai and Shenzhen – inched up 0.06 per cent, or 2.55 points, to 4,141.30.

The Shenzhen Composite Index lost 0.02 per cent, or 0.49 points, to 1,941.31, while the Nasdaq-style ChiNext fell 0.01 per cent, or 0.24 points, to 1,801.18.

All three major US indices closed higher on Friday, with the Dow Jones Industrial Average gaining 0.88 per cent, or 220.73 points, to 25,295.87, and the S&P 500 tacking on 0.7 per cent, or 19.16 points, to 2,743.15 in its best week since December 2016. Meanwhile, the Nasdaq Composite advanced 0.83 per cent, or 58.64 points, to 7,136.56.

Investors in the US shrugged off weaker-than-forecast jobs figures last week, focusing instead on speculation that Republican tax cuts would lead to higher corporate earnings.

In Asian trading early on Monday morning, South Korea’s Kospi was up 0.39 per cent, or 9.34 points, to 2,507.36 by 8:50am and the Sydney All Ordinaries gained 0.28 per cent, or 17.70 points, to 6,247.40. Tokyo’s stock market is closed for a holiday.