Hong Kong Stocks End High After Turbulant Day

May 24, 2018

NewsStandOnline.Net (24-May-2018): Hong Kong shares ended marginally higher today after changing directions several times as concerns over trade relations between China and the U.S. kept investors cautious.

The Hang Seng Index was up 0.3% to 30,760.41, after swinging within a 200-point range all day. China Petroleum & Chemical (Sinopec) and PetroChina added 2.5% and 1.5%, respectively, for their first gain in three days. Pork producer WH Group, which had rallied 4.9% on Monday amid signs of a thaw for Sino-U.S. trade tensions, was down for a second consecutive day with a loss of 3.2%.

Trading activity was modest, with less than HK$91 billion ($11.59 billion) changing hands on the main board. Mainland Chinese investors, who can access stocks traded in the city through electronic trading links with Shanghai and Shenzhen markets, were net sellers today.

U.S. President Donald Trump yesterday tweeted that while the nation’s trade deal with China was “moving along nicely,” the U.S. will probably have to use “a different structure in that this will be too hard to get done.” The post further unnerved investors who were already uncertain about the dynamic between the world’s two largest economies.

Hong Kong Stocks Hit 2-Year High

Separately, minutes of the U.S. Federal Reserve’s latest meeting indicated a rate increase in June but did not signal a faster pace of hikes going forward.

Francis Lun, chief executive at GEO Securities in Hong Kong, said the city’s stock market lacked momentum. “People thought the U.S. and China had reached a trade deal, but yesterday’s big decline erased gains a few days ago, and shows the market has lost hope now,” Lun said. “Only consumption stocks, such as education stocks, could rally in this market situation.”

In the mainland, the Shanghai Composite Index fell 0.5%. The yuan traded onshore strengthened 0.1% to 6.3827 against the U.S. dollar. In the wider region, the Nikkei Asia300 Index gained 0.1%.

Shares of aluminum producer United Company Rusal jumped 6.9% in Hong Kong. The company had resumed shipping the industrial metal to some customers last week following an extension of the deadline for companies to wind down their business with the Russian company. The gains came even as the company said Chief Executive Alexandra Bouriko had resigned with immediate effect and Evgeny Nikitin was named acting chief.