Hong Kong stocks end lower, as profit-taking puts the brakes on Geely Automobile’s rally
Equity analysts say the market may be undergoing a technical correction, consolidating gains after reaching a near 10-year high last week
Hong Kong’s stocks fell on Monday, as the year’s best-performing stocks including Geely Automobile Holding retreated, after the city’s benchmark rose to an almost 10-year high last week.
The Hang Seng Index dropped 0.64 per cent, or 181.36 points, to 28,305.88. The Hang Seng China Enterprises Index, or the H-share gauge, slipped 0.58 per cent to 11,491.07.
The mainland’s equity benchmarks were firm however on speculation of state intervention to ensure market stability amid the ongoing 19th party congress that is expected to see a reshuffle of its highest decision-making Politburo Standing Committee.
The Hang Seng Index appears to be consolidating after it rose to the highest level since December 2007 on Wednesday, and given that the gauge has climbed 29 per cent so far this year.
“Most likely, it’s a technical correction and the market needs to take a breather here to allow some investors to take profits from this high-flying level,” said Wei Wei, a trader at Huaxi Securities in Shanghai. “The good momentum is still there.”
Some of the biggest gainers on the benchmark this year fell. Geely Automobile Holdings dropped 2.1 per cent to HK$25.75 after surging more than 200 per cent year to date. CK Asset Holdings slid 1.2 per cent to HK$65.90 and Wharf Holdings shed 1.25 per cent to HK$71.35. The stocks have gained at least 38 per cent this year.
Financials also saw losses. Industrial & Commercial Bank of China was the biggest blue-chip lower, sliding 2.22 per cent to HK$6.16. Bank of China fell 1.24 per cent to HK$3.99 and China Construction Bank declined by 1.15 per cent to HK$6.85. AIA dropped 1.66 per cent to HK$59.2 and knocking off 38 points off the benchmark index.
