Hong Kong and Shanghai Stocks Turned Lower Amid Weak Earnings Outlook

Li Chen
03 Sep, 2024
Hong Kong

Stocks in Shanghai and Hong Kong struggled for the second trading day in September amid weak investor sentiment. 

The Hang Seng index declined 0.3%, and the CSI index struggled to rise above the flatline in choppy trading. 

Investors sold stocks after banks and real estate companies reported weak interim results and estimated a weaker outlook for the second half. 

The Hang Seng index has struggled to hold on to its 4% gain in August after New Word Development estimated annual loss, following a string of weak results from other developers including China Vanke, China Resources Land, and Kaisa Group. 

Banks were also under pressure after Industrial and Commercial Bank of China and China Construction Bank reported weak results. 

Investor confidence remained weak after China's manufacturing sector, one of the key drivers of the economic growth, contracted for the fourth month in a row in August. 

Moreover, foreign investors continue to lighten their stock holdings amid poor earnings visibility, fragile economic recovery, and a lack of strong policy response. 

 

China Stock Movers 

The Hang Seng index decreased 0.3% to 17,627.05, and the CSI 300 index edged up 0.01% to 3,266.44. 

China Vanke increased 2.6% to HK $3.97, China Resources Land gained 1% to HK $21.15, and New World Development fell 1.9% to HK $6.70. 

Industrial and Commercial Bank of China decreased 2.8% to HK $4.25, China Construction Bank fell 1.7% to HK $5.34, and Bank of China dropped 2.2% to HK $3.42. 

Tech stocks traded higher and bucked the market weakness as investors hope the intense price war among leading companies will end soon. 

Baidu decreased 0.9% to HK $81.25, Meituan rose 1.3% to HK $117.80, Alibaba Group gained 0.7% to HK $80.05, and JD.com fell 0.5% to HK $104.60. 

Sanergy Group plunged a whopping 98% to 39 HK cents after the Securities and Futures Commission of Hong Kong said 90.2% of the company's shares are held by a group of investors, raising the risk of elevated volatility from a highly concentrated shareholder base. 

Two companies listed their shares in mainland China as investors warmed up to initial public offerings. 

Shanghai InnoStar Bio-tech soared 40% to 20.80 yuan in Shanghai trading, and Zhengzhou Suda Industries Machinery Service soared 39% to 43.37 yuan in Shenzhen trading.