China Construction Bk leads HK shares down 2.9 pct
Hong Kong shares fell 2.9 percent on Tuesday, unsettled by worries over a protracted global recession, while China Construction Bank slid after Bank of America BNC.N said it was boosting its stake in the Chinese lender at a discount to its current trading price.
Chinese auto makers dodged the downdraft in the broad market to notch up strong gains on talk that they would be likely beneficiaries of state aid as they cope with falling sales volumes in the face of a global recession.
Shares in Brilliance China Automotive (1114.HK: Quote, Profile, Research, Stock Buzz) rallied 18 percent while Geely Automobile Holdings (0175.HK: Quote, Profile, Research, Stock Buzz) rose 9.3 percent. Car sales fell for the second month in a row in September as a slowing economy slammed demand in the world’s second largest vehicle market.
The benchmark Hang Seng Index .HSI ended the morning session down 398.30 points at 13,131.23.
“The index will break the psychological support level of 13,000 in the short term following the downward trend in U.S. market,” said Castor Pang, strategist with Sun Hung Kai Financial.
“But the weak volumes suggest that there is no crazy dumping or panic selling here, which means the index is unlikely to test its previous low in the near term.”
Mainboard turnover fell to HK$21.6 billion ($2.8 billion) from HK$23 billion at midday on Monday.
Shares in Hong Kong Exchanges & Clearing (0388.HK: Quote, Profile, Research, Stock Buzz), Asia’s largest listed bourse operator, fell 7.7 percent, taking its two-day decline to more than 14 percent after Morgan Stanley slashed its target price on the stock.
The U.S. investment bank cut its target price on HKEx to HK$38 from HK$75 on slowing market activity amid mounting worries over a global economic recession. Turnover on the bourse fell to a five-month low of HK$39.8 billion on Monday as investors kept to the sidelines.
Shares in HSBC Holdings (0005.HK: Quote, Profile, Research, Stock Buzz) slid 1.6 percent after Goldman Sachs slashed its target price on the stock to HK$77 from HK$102 as it expected another year of weak earnings for the bank’s consumer loan and credit card arm, Household International, amid disappointing economic data from the United States.
HSBC announced on Tuesday its was cutting 500 jobs in Asia as it grapples with global economic uncertainties.
Tags: China Construction Bank, HK, investment, Stock