Hong Kong stocks pounded by expectations Trump will sign bill supporting city’s protesters, raising doubts on trade deal

Hong Kong stocks fell Thursday on expectations US President Donald Trump will sign legislation supporting the city’s pro-democracy protesters, threatening fragile US-China negotiations in a trade war that has rocked global markets for more than a year.

The Hang Seng fell 1.5 per cent to 26,483.17, with all but two stocks of the 50 on the benchmark closing with losses. It was its worst fall in a week, after dropping 1.8 per cent last Wednesday.

Mainland stocks declined, but less so.

The Shanghai Composite Index declined 0.3 per cent to 2,903.64, while the Shenzhen Component Index dropped 0.2 per cent, and the CSI 300 Index of large cap stocks traded in Shanghai and Shenzhen fell 0.5 per cent.

Hong Kong human rights bill clears US Congress, is sent to Donald Trump to sign into law

“The progress of the Hong Kong democracy bill is faster than expected,” said Alan Li, portfolio manager at Atta Capital.

It means “more uncertainty raised on a trade deal, and the market is worried about whether an agreement can be signed in December. The Hang Seng is likely to test again its support at 26,000,” said Li.

The trade of the day in Hong Kong was in Asiaray Media Group, which speculators stampeded in, driving it up more than 100 per cent in intraday trading. Alibaba Group Holdings’ affiliate Ant Financial Services bought a 7.5 per cent of the advertisement company.

Speculators bagged their profits and scrammed, and the stock closed ahead 19.9 per cent to HK$5.59.

Also in the spotlight was the Artgo Holdings, a Chinese marble producer that had gained nearly 3,800 per cent this year as of Wednesday’s close. But it fell nearly 98 per cent to 30 Hong Kong cents when trading was halted, after MSCI reversed plans to add it to one of its indexes following “further analysis and feedback from market participants on investability.”

High-flying Hong Kong stock plunges 98 per cent after MSCI drops plan to add into indexes

The day’s two gainers on the Hang Seng Index were snack maker Want Want China, which rose 1.4 per cent to HK$6.56 after Wednesday’s profit taking, and Hengan International, the diaper and sanitary napkin manufacturer that is experiencing intense competition from international rivals in the China market, which rose 0.4 per cent to HK$51.05.

Tencent fell 1.8 per cent to HK$329.40, while lens maker Sunny Optical dropped 4.2 per cent to HK$121.40.

WH Group, the world’s biggest pork processor, fell 3.1 per cent to HK$8.05. It has been weighed down by China tariffs on pork imports as well as the African swine fever that has roiled the market for mainland consumers’ favourite meat.

Meanwhile, Sa Sa International Holdings dropped 3.7 per cent to HK$1.8 after reporting its first half year-on-year retail sales in the Hong Kong and Macau markets decreased by 19.4 per cent. It blamed the double whammy of the US-China trade war and Hong Kong protests for beating down foot traffic, especially from the mainland.

“The number of transactions contributed by Mainland tourists in the Group’s Hong Kong stores decreased significantly by 51.2% year-on-year from July to September 2019, while that of local consumers recorded a slight decline of 3.0%. However, since Mainland tourists contribute a much larger proportion of revenue in this market, the Group’s overall retail sales performance in the second quarter decreased by 35.4% in Hong Kong,” it said in its stock exchange filing, which was released at the lunch break.

Kasen International Holdings, a Chinese maker of furniture and leather products, plummeted 90 per cent in Hong Kong today after US short seller Blue Orca Capital accused it of selling best assets at bargain prices and fabricating investment projects in Cambodia.

Chinese furniture maker Kasen plunges 90 per cent in Hong Kong trading after critical report by short-seller

The report contains “untrue and misleading” information, Kasen said in an exchange filing in response to attack. At Kasen’s request, trading was halted before the lunch break. It said it would provide a response to the accusations.

In the mainland, liquor giant Kweichow Moutai slipped 0.2 per cent to 1,231.30 yuan, while the Industrial and Commercial Bank of China fell 1.2 per cent to 5.73 yuan.

Meanwhile, Jiangsu Hengrui Medicine dropped 2.5 per cent to 92.60 yuan and Ping An Insurance dropped 1.9 per cent to 86.34.

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