New | Hong Kong stocks drift lower ahead of budget speech, Shanghai also loses ground
Hong Kong stocks ended the morning session lower on Tuesday, amid a cautious mood as investors pared back bets ahead of Wednesday’s Budget speech.
The Hang Seng Index was down 0.54 per cent at 19,359.93, effectively erasing gains from Monday.
Mainland Chinese stocks fell even further on Tuesday, failing to track overnight gains in New York on Monday, where an upbeat performance by US shares and higher crude oil prices signalled a shift towards risk assets and away from safe havens such as gold.
The Shanghai Composite Index was 1.26 per cent lower at 2890.29 in the early afternoon, while the Shenzhen index also dropped to 1,868.91, or 1.02 per cent lower from its previous close.
Haitong International Sales Trading managing director Andrew Sullivan said globally traders were cautious, while in Hong Kong the imminent budget was keeping markets flat.
“There are a lot of macro economic things out there are leaving people dead in the water,” he said. “In Hong Kong, you’ve got a lot of caution ahead of tomorrow’s budget with the expectation some freebies may be taken away.”
Sullivan also said the pre-reporting season black out had led to a lack of new information to influence market decisions.
“Investors are left a bit watching and wondering,” he said. “HSBC’s results yesterday were a bit of a surprise for people and they probably didn’t set a great tone for results to come.”
HSBC’s shares ended the morning session 0.4 per cent lower, while Hang Seng Bank fell back a sharper 2.68 per cent, giving up some of its advance Monday after the bank reported better than expected 2015 results.
Meanwhile China’s central bank weakened the yuan by the most in six weeks following a stronger US dollar overnight. The People’s Bank of China set the daily midpoint at 6.5273 against the dollar on Tuesday morning, 0.17 per cent weaker.
In New York, the Dow Jones Industrial rose 1.4 per cent to 16,620.66 on Monday, while in London, the FTSE finished 1.47 per cent higher at 6,037.73.
The advance came as oil prices jumped by more than 6 per cent after oil-importing countries said energy stockpiles would begin to grow at a slower rate.
West Texas crude oil cracked the US$30 a barrel mark settling at US$31.48 a barrel.
