Hong Kong shares fell a fourth consecutive session on Tuesday and commodity-related stocks underperformed, but Chinese coal firms pared losses late in the session, suggesting investors may find some value in the sector. The string of losses in the broad market has been exacerbated by weak US jobs data last week and raised the risk the Hang Seng index, down 0.4 percent on the day, may test a low for the year plumbed in March.
The Hang Seng Index cut early losses to close down 0.4 percent at 22,868.7, falling further below its 200-day moving average at 23,091.8, a level that may cap any near-term rebound. China Shenhua Energy Co Ltd, the world's largest coal miner by market value, was the second biggest drag on the Hang Seng index, though the stock fought back to finish down 1.5 percent after shedding as much as 4 percent on the day in nearly three times its average 30-day volume.
Shenhua has fallen 7.8 percent since Friday, the steepest two-day decline since March 2010, but is still someway off being technically oversold, with its 14-day relative strength index (RSI) holding at 36.4. But with Yanzhou Coal Mining Co Ltd and China Coal Energy Co Ltd both finishing in positive territory on Tuesday, gaining 1.7 and 3 percent respectively, analysts said the selloff in the coal sector is overdone, recommending investors buy on dips.
AIA Group Ltd and Hengan International Group experienced contrasting debuts as Hang Seng Index constituents on Tuesday. Both stocks have enjoyed a bounce since the Hong Kong Exchange announced it was adding these two stocks to its Hang Seng benchmark, but while AIA closed down 1.60 percent, Hengan was up 0.3 pct at a five-month high in decent volume.
Inner Mongolia Baotou Steel Union Co Ltd gained a maximum 10 percent on Tuesday, moving into technically overbought territory as its 14-day RSI value hit a two-month high. It is now up 11.6 percent on the quarter, outpacing the Shanghai Composite's 6.3 percent decline.
The benchmark Shanghai Composite Index finished up 0.6 percent at 2,744.3 on the first trading day of the week, with heavyweights PetroChina Co Ltd and Sinopec Corp its two biggest support on the day. PetroChina's gains on Tuesday was driven by volume 1.6 times its 30-day average, but still barely chipped at the 10 percent PetroChina lost since hitting its 2011 high at the end of March. A-share turnover on Tuesday stayed low. At 78.9 billion yuan, it was almost 38 percent below its 2011 average, currently at 126.8 billion yuan.