Hong Kong shares give up gains as financials, resources stocks weigh

  • The Hang Seng index fell 0.7pc, to 24,710.59 points, while the China Enterprises Index, which tracks Hong Kong-listed Chinese firms, lost 0.9pc, to 10,097.08 points.
30 Jul, 2020

Hong Kong shares gave up gains to close lower on Thursday, as losses in financials and resources stocks outweighed gains in healthcare plays.

The Hang Seng index fell 0.7pc, to 24,710.59 points, while the China Enterprises Index, which tracks Hong Kong-listed Chinese firms, lost 0.9pc, to 10,097.08 points.

Hang Seng rose more than 1pc in the morning session, as the US Federal Reserve's pledge to limit economic damage from the pandemic lifted sentiment across global equity markets.

But the market erased gains in afternoon trading, reflecting fragile investor sentiment amid rising Sino-US tensions and surging coronavirus cases.

The financials and material sectors were among the biggest losers.

Healthcare stocks gained on reports that Chinese drug company Sinopharm and Parana state agreed to launch the fourth major COVID-19 vaccine trial in Brazil and will seek regulatory approval in the next two weeks.

Hong Kong's stock market is dominated by Chinese companies, which benefit from the country's economic recovery, but the market is also vulnerable to global money flows.

Emerging market equities are expected to outperform developed market equities and fixed income, said David Chao, global market strategist, Asia Pacific at Invesco.

Hong Kong's newly-launched Hang Seng Tech index, which tracks 30 major tech stocks including Alibaba Group and Tencent, rose 0.2pc on Thursday.

Goldman Sachs estimates that the Hang Seng Tech index will attract $2 billion of passive buying over the next 12 months, and $14 billion over the next five years.

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