Hong Kong stocks record biggest weekly loss in 4 months on China growth, earnings jitters

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Concerns about the durability of China’s growth and corporate earnings reports sent Hong Kong stocks to their steepest weekly decline in nearly four months, as investors moved beyond their optimism about the outcomes of tariff talks.

The Hang Seng Index retreated 1.1 per cent to 24,507.81 at the close on Friday. For the week, the gauge was down 3.5 per cent, its biggest such loss since April 11. The Hang Seng Tech Index lost 1 per cent. On the mainland, the CSI 300 Index climbed 0.1 per cent and the Shanghai Composite Index fell at least 0.4 per cent.

China Petroleum and Chemical Corp, the nation’s largest oil refiner that is also known as Sinopec, slumped 5.9 per cent to HK$4.33 after saying it expected a first-half profit decline of 40 to 44 per cent. Peer PetroChina fell 3.3 per cent to HK$7.42. Macau casino operator Sands China slipped 0.8 per cent to HK$18.88 ahead of its earnings report later on Friday. Tencent Holdings, the second-largest constituent in the Hang Seng Index, sank 2.7 per cent to HK$535.

The stellar run that drove the Hang Seng Index to its highest point in three and a half years last month showed signs of fatigue on sluggish China economic data. An official survey this week showed that the manufacturing industry unexpectedly contracted in July, while heavyweight HSBC Holdings reported a decline in quarterly profit. Investors were struggling with a lack of fresh stimulus triggers after a Politburo meeting chaired by President Xi Jinping this week only reiterated policies from earlier conferences.

“The market has accumulated significant gains since April 7 [Liberation Day],” said Amber Zhou, an analyst at Haitong International. “We expect the market to move into a pattern of sideways trading to consolidate the momentum and wait for fresh policies.”

The Hang Seng Index is down nearly 4.5 per cent from a high reached on July 24. The pullback also reflected investor disappointment that China and the US failed to seal a trade deal this week, stoking concerns about a resurgence in tensions, according to Wang Kai, a strategist at Morningstar.

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