Hong Kong stocks turn edgy on geopolitics; tech gains after China okays more online games
- Beijing approved 104 new video games from mainland developers this month after fewer than 100 titles each were given the nod in April and May
The Hang Seng Index rose 0.1 per cent to close at 18,089.93. The Hang Seng Tech Index advanced 0.9 per cent and the Shanghai Composite Index climbed 0.8 per cent.
Electric-vehicle (EV) maker BYD fell as Chinese and EU officials held talks on EV tariffs and following Warren Buffett’s move to cut his stake in the company for the second time this month. Gold Producer Zijin Mining Group tumbled on falling bullion prices.
“Hong Kong’s market is expected to trade in a narrow range in the short term,” said Yan Zhaojun, an analyst at Zhongtai Securities. “Latest marco data indicates a weak recovery in China’s economy, which doesn’t support a one-way upside market.”
The run-up that sent the Hang Seng Index into the bull market has stumbled, with the benchmark falling more than 8 per cent from this year’s high in May, as investors track China’s patchy economic growth and its plans for reforms. Economic data for May showed a pick up in retail sales but industrial output remained sluggish and home prices continued its downward spiral.
The overhang of geopolitical tensions linger. On the heels of moves by the US and the European Union, Canada said that it would start a public consultation on imposing tariff on Chinese electric vehicle imports, a move that is expected to hit BYD hardest. China and the European Union are entangled in an escalating trade dispute, with Beijing launching an anti-dumping probe into the imports of pork from the block as retaliation.
NetEase rallied 6.2 per cent to HK$160.60. Jefferies lifted the price target for the stock to HK$202, implying an upside of 26 per cent from the current levels. SMIC added 2.9 per cent to HK$17.70.
BYD slipped 0.9 per cent to HK$237.40. Buffett’s Berkshire Hathaway sold 2.01 million Hong Kong-traded shares of the company on June 19, cutting its stake to 5.99 per cent from 6.18 per cent, according to the exchange filing. That followed a reduction made by the fund on June 11. Zijin Mining lost 1.3 per cent to HK$16.40 as gold prices slipped.
Two companies made their trading debut on the mainland. Yonz Technology, which makes photovoltaic products, jumped 48 per cent from its initial public offering price to 34.47 yuan in Shanghai and Aidite Technology, a producer of dental materials, surged 87 per cent to 84.02 yuan in Shenzhen.
Other major Asian markets were broadly higher. Japan’s Nikkei 225 climbed 1.3 per cent and South Korea’s Kospi rose 0.6 per cent, while Australia’s S&P/ASX 200 lost 0.7 per cent.
