News Column

Hong Kong stocks end flat

August 30, 2014

Hong Kong stocks ended flat Friday as forecast-beating second-quarter US growth data was offset by increased tensions between Russia and Ukraine.

The Hang Seng Index edged up 1.06 points to 24,742.06 on turnover of HK$81.33 billion ($10.49 billion).

Regional markets have enjoyed a recent rally but investors took fright at claims that at least 1,000 Russian troops had entered Ukraine to back up pro-Kremlin separatists fighting Kiev’s rule.

The news sparked concerns of a confrontation between Russia and Ukraine.

Moscow denies the accusations but US President Barack Obama said it was “plain for the world to see” that Russian forces were fighting in Ukraine. He and German Chancellor Angela Merkel warned the actions “cannot remain without consequences”, raising the prospect of even more sanctions against Moscow.

However, Putin called on separatists in Ukraine to allow Ukrainian troops out of the rebel-held town of Novoazovsk, easing some tensions.

The crisis diverted attention from Commerce Department data showing the US economy expanded a 4.2 percent annually in April-June, revising upward its previous 4.0 percent estimate.

On Wall Street the S&P 500, which ended above 2,000 for the first time this week, pulled back from Wednesday’s record close, shedding 0.17 percent. The Dow lost 0.25 percent and the Nasdaq dropped 0.26 percent.

In Hong Kong, Cathay Pacific Airways eased 0.83 percent to HK$14.40,

HSBC added 0.54 percent to HK$83.65 and Henderson Land Development shed 1.15 percent to HK$51.35.

Internet firm Tencent fell 0.47 percent to HK$127.2, China Mobile added 0.94 percent to HK$96.3 and CNOOC jumped 3.57 percent to HK$15.68.

In China the benchmark Shanghai Composite Index rose 0.97 percent, or 21.38 points, to 2,217.20 on turnover of 93.0 billion yuan ($15.1 billion).

The Shenzhen Composite Index, which tracks stocks on China’s second exchange, gained 1.13 percent, or 13.55 points, to 1,212.26 on turnover of 107.6 billion yuan.

However, Friday’s increase “looks like a technical rebound which is unlikely to be sustained in the absence of positive headlines about economy,” Zhang Yanbing, an analyst at Zheshang Securities, told Dow Jones Newswires.

Dealers are now awaiting the release of manufacturing data for August, which is due Monday.

While the latest data showed the economy picked up in April-June there are concerns over whether the rebound can be sustained in the face of an unruly slowdown in the housing market and risks in the banking sector.

Defence stocks led Friday’s gains on hopes that the industry, which is largely controlled by the state, would benefit from the unfolding state-owned enterprises reform.

In Shanghai, state-owned China Avic Electronics jumped by its 10 percent daily trading limit to 24.16 yuan, while Sichuan Chengfei Integration Technology Corp. rose 7.5 percent to 60.45 yuan in Shenzhen.

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Source: Frontier Star (Pakistan)

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