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People walk out of the Stock Exchange of Hong Kong offices in the Central district of Hong Kong. Equities on the Hong Kong stock exchange have taken a hit in the past few sessions. Photo: AFP

Hong Kong stocks take a beating for a sixth day while China stocks snap a three-day rally

  • AAC Technologies and Sunny Optical were the biggest losers as investors resort to profit-taking

Markets were dismal on Monday as Hong Kong extended its longest losing streak since October, and China halted three days of gains.

No positive news came from the US-China trade talks in Washington, while unrest continued for the 16th consecutive weekend in Hong Kong.

The Shanghai Composite lost 0.97 per cent to 2,977.08. All sectors and 80 per cent of listed stocks fell, and just five companies rose by the daily limit of 10 per cent. The CSI 300 of large caps fell 1.14 per cent to 3,890.66.

In Hong Kong, the Hang Seng lost 0.87 per cent to end at 26,205.09 for a sixth straight session – its longest losing streak since October 2018.

Protests force Hong Kong’s small stock brokers out of business, with little chance of rescue by Chinese buyers

AAC Technologies and Sunny Optical were the biggest losers after investors took profits following strong gains by the smartphone component makers.

“The sentiment is poor, there is no positive news ... if anything it is getting worse,” said Francis Lun, chief executive of Geo Securities, pointing to the deadlock in the US-China trade talks and the ongoing unrest in Hong Kong.

“Trade talks are going nowhere, despite them trying to put a brave face on it,” he said. “There is nothing to cheer.”

The US Trade Representative’s office issued a brief statement to say that two days of preliminary trade talks with China were “productive”. Previously planned principal-level trade meetings in Washington will take place in October, it said. China’s Commerce Ministry also described them as “constructive”, and said it had a good discussion on “detailed arrangements” for talks in October.

The cancellation of a trip to US farms in Montana, northwest America, next week by Chinese agriculture officials, however, was a cause for worry. A senior member of the delegation told state-owned media outlet China Business News that the change of plan had nothing to do with trade negotiations, as the trip was a stand-alone arrangement.

Meanwhile, over three months of protests in Hong Kong continue to harm businesses as tourists stay away and locals are hesitant to spend money in an increasingly fragile economy.

Swire Properties hit its lowest level since January 2017, losing 1.8 per cent to HK$24.5, after Bloomberg reported the developer had temporarily reduced rents at Pacific Place shopping centre in Admiralty during “this challenging time”.

Since the first large-scale protest on June 9, Swire Properties’ stock price has dropped almost 27 per cent.

Rail operator MTR Corporation, which also owns shopping malls, fell about 1 per cent to HK$45.50, to its lowest level since September 3. Its stock has lost 6 per cent since June 9.

Protesters have thrown petrol bombs and started fires inside stations, and vandalised shopping malls.

In a statement on Sunday, MTR said it “strongly condemns vandalism of railway facilities”, and expressed concern over a suspected arson case at its depot in Siu Ho Wan.

Separately, Fosun International lost 1.5 per cent, and Fosun Tourism Group fell 4.73 per cent after the collapse of British travel firm Thomas Cook.

In August the Shanghai-based conglomerate took a 75 per cent stake in Thomas Cook’s package tour division and a 25 per cent holding of airline business, in a £900 million (US$1.1 billion) rescue deal. The world’s oldest travel firm collapsed on Monday after it failed to secure a rescue package from its lenders.

Media reports said that Fosun Group was “disappointed” Thomas Cook was not able to find a solution and that its recapitalisation plan was no longer applicable.

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