January 30, 2014 / 5:01 AM / in 4 years

Hong Kong shares have feeble January finish as holiday mood dimmed

* HSI -0.5 pct, H-shares -0.8 pct, CSI300 -0.7 pct

* Hong Kong indexes have biggest monthly loss since June

* Sands China ends up 2.5 pct after starting 3 pct down

* China Shipping Development tanks after warning of loss

By Clement Tan

Jan 30 (Reuters) - Hong Kong shares ended January near a five-month low, as risk appetites were reduced on Thursday by the U.S. Federal Reserve’s fresh cut in monetary stimulus and an underwhelming private survey of China factory activity.

Mainland Chinese markets also retreated, ahead of a week-long Lunar New Year holiday that starts on Friday. Hong Kong markets closed at mid-day Thursday and will resume trading on Tuesday.

The Hang Seng Index ended down 0.5 percent at 22,035.4 points, while the China Enterprises Index of the top Chinese listings in Hong Kong sank 0.8 percent. Early on Thursday, both indexes touched their lowest levels since August, but they pared losses before the close.

They shed 5.5 and 9.2 percent, respectively, in January, making it their worst month since June.

The Shanghai Composite Index, at its midday trading break, was down 0.5 percent, while the CSI300 of the largest Shanghai and Shenzhen A-share listings was off 0.7 percent.

For January, they were down 3.6 and 5 percent, respectively. During 2013, they tanked 6.7 and 7.6 percent, weighed down by slowing growth and a liquidity squeeze amplified by the resumption of initial public offering (IPO) approvals after a halt of more than a year.

“There’s too much going on right now, markets are still fragile so much of today’s action is about not taking unnecessary risks ahead of the holiday,” said Linus Yip, a Hong Kong-based strategist with First Shanghai Securities.

“But I think people need to be prepared to see China’s economy slowing more than what the consensus is expecting,” Yip added.


Hong Kong’s Thursday losses came in relatively robust volumes. Growth-sensitive sectors were among the biggest index drags as investors also took profit in some outperformers while rolling into the Macau casino sector.

China Merchant Bank sank 1.7 percent in Hong Kong and 1.1 percent in Shanghai. Anhui Conch Cement shed 1.8 percent in Hong Kong and 1.7 percent in Shanghai.

Sands China ended Thursday up 2.5 percent, recovering from an early drop of more than 3 percent after its parent Las Vegas Sands reported fourth-quarter results broadly in line with expectations.

Lenovo Group tumbled 8.2 percent after closing on Wednesday at its highest since April 2000. The Chinese technology giant said it agreed to buy Google Inc’s Motorola handset division for $2.9 billion in its second major deal involving the U.S. in a week.

China Shipping Development dived 4.7 percent in Hong Kong after it warned late on Wednesday of a loss of up to $380.2 million for 2013.

The China Markit/HSBC final manufacturing PMI for January dipped to 49.5 from December’s 50.5, the first deterioration in six months. This was in line with the 49.6 reported in the flash PMI a week earlier, which some analysts cited as one catalyst for an emerging markets selloff in the past few sessions.

The Fed’s well-flagged decision to trim its bond-buying programme by a further $10 billion a month fuelled market gloom, due to the prospect of fresh outflows from emerging markets which would hurt those economies.

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