Hong Kong and China stocks moved lower in the morning session on Monday as traders responded to central bank movements, trade tensions and the US-led strikes in Syria.
Weakness in the Hong Kong dollar and expectation of continued central bank intervention was dragging on Hong Kong stocks while lingering concern over the US-China trade relationship weighed on Chinese equities, said Ben Kwong, KGI Securities Hong Kong head of research.
Property developers Country Garden Holdings and Sino Land Co were off by 4 per cent and 2.5 per cent, respectively on Monday, while the broader Hang Seng index was off 1.8 per cent. The Hong Kong Monetary Authority intervened on Thursday and Friday to prop up the Hong Kong dollar after it fell to HK$7.85, the bottom of its trading band and the lowest level since 2005. Analysts said further interventions could put pressure on Hong Kong’s property market.
Russian aluminium producer Rusal also weighed on the Hang Seng. It tumbled as much as 21 per cent after the US promised new sanctions against Moscow for supporting the Syrian government.
On the mainland, the CSI 300 index of major companies listed in Shanghai and Shenzhen was off 1.6 per cent. The financials segment of the index was down 2.8 per cent after the People’s Bank of China raised 14-day rates. But shares in companies with links to the Chinese island of Hainan popped on Monday after President Xi Jinping said the province would be developed into a pilot free trade zone.
Other bourses in Asia Pacific were holding in positive territory, in a sign that investors were not expecting a major escalation in the conflict in Syria after the latest US-led military strikes against the Assad regime.
The S&P/ASX 200 in Sydney was up 0.2 per cent with a fall for industrials outweighed by gains across the other market segments. The Topix in Tokyo added 0.1 per cent despite falls for energy and resources stocks on lower oil prices.