Higher-than-expected inflation data from China spurred a sharp late-day selloff in Hong Kong, while stocks in Shanghai tumbled to a 12-month low.
The Hang Seng fell 23 points, or 0.1%, to 23,878.35, after gaining as much as 119 points earlier. China's Shanghai Composite Index lost 57 points, or 1.7%, to 3291.60.
"Hong Kong is not really holding up," says Andrew To, head of sales and research for Tai Fook Securities in Hong Kong. "Over the next few days there will be further offloading and profit-taking until the Hang Seng goes to 23,000 points or below. Then that could stimulate some long-term funds to rebuild their portfolios here."
China's central government announced that consumer price inflation for March was 8.3%, ahead of the expected 8.2%. Still, the number was half a percentage point lower than inflation for February. Gross domestic product for the first quarter was higher than expected, at 10.6% vs. 10.4% estimated by analysts, although it fell from 11.2% in the previous quarter.
China Watch: Beware the Telecoms |
| |
Despite the warm inflation number, traders and analysts in Hong Kong didn't trust the government's numbers, speculating that the real figure is in fact much higher.
An easing of commodity prices after an overnight rally in crude delivered another blow to Chinese shares. Crude oil slipped 10 cents to $113.69 a barrel, while gold fell by $1.09, to $926.82 an ounce in Singapore trading. Conversely, because of the overnight rally in crude, airline stocks were also heavily sold.
PetroChina(PTR Quote - Cramer on PTR - Stock Picks) fell 0.4% to 16.99 yuan in Shanghai, and it lost 1% to HK$9.77 in Hong Kong.
Aluminum Corp. of China(ACH Quote - Cramer on ACH - Stock Picks) dove 4.5% to 20.85 yuan in Shanghai and slipped 0.7% to HK$12 in Hong Kong.
Sinopec Shanghai Petrochemical(SHI Quote - Cramer on SHI - Stock Picks) dipped 1.4% to 8.29 yuan.
Air China(AIRYY Quote - Cramer on AIRYY - Stock Picks) plunged 7.2% to 14.25 yuan, and
China Eastern Airlines(CEA Quote - Cramer on CEA - Stock Picks) slid 5.6% to 10.82 yuan.
Cathay Pacific(CPCAY Quote - Cramer on CPCAY - Stock Picks) declined 1.7% to 15.44 yuan.
Traders said they were heavily shorting shares in
Alibaba.com(ALBCF Quote - Cramer on ALBCF - Stock Picks), despite an increase in Chinese mainland retail sales. Alibaba.com fell 3.8% to HK$13.06. That could make for an uncertain performance in shares of
Baidu.com(BIDU Quote - Cramer on BIDU - Stock Picks), which track both Chinese domestic consumption and the Chinese technology sector.
Telcos mainly held up in Hong Kong after an announcement by the Ministry of Information in China that operators will be able to set their own prices for fixed-line and data services.
China Mobile (CHL Quote - Cramer on CHL - Stock Picks) gained 0.2% to HK$127.40, and
China Telecom (CHA Quote - Cramer on CHA - Stock Picks) rose 1.2% to HK$4.90.
China Unicom (CHU Quote - Cramer on CHU - Stock Picks) jumped 1.7% to HK$16.40, and
China Netcom (CN Quote - Cramer on CN - Stock Picks) gained 3% to HK$22.40.
Daniel M. Harrison
RSS
