Hong Kong Stocks Weaken In Post-holiday Return

MarketWatch Pulse

Hong Kong stocks opened the Year of the Goat higher Monday but quickly erased the gains and turned lower, with the Hang Seng Index off 0.6% despite an advance for many of the region's other major markets. The Hang Seng China Enterprises Index, which tracks mainland Chinese companies listed in Hong Kong, declined 1.2%, with the Shanghai and Shenzhen bourses still closed for the Lunar New Year. Top-weighted Hang Seng component HSBC Holdings PLC edged down 0.2% ahead of its annual results, due after Asia markets' close on Monday, with investors watching closely to see how recent tax-evasion allegations against the bank's Swiss unit might affect the company's future performance. Major mainland Chinese banks also retreated across the board, as China Merchants Bank Co. lost 1.6%, Industrial & Commercial Bank of China Ltd. fell 0.7%, both China Construction Bank Corp. and Bank of Communications Co. dropped 0.6% each, and Bank of China Ltd. and Agricultural Bank of China Ltd. traded 0.5% lower apiece. Mainland property developers also saw wide losses, with top underperformers including Poly Property Group Co. (down 1.4%), Vanke Property Overseas Ltd. (off 1%), and index component China Overseas Land & Investment Ltd. (lower by 0.6%). Among other market movers, Italian fashsion firm Prada SpA rose 0.4%, shrugging off a slight 1% drop of its sales in 2014 compared with the previous year. Asian life insurer AIA Group inched up 0.1%, with the market awaiting its annual results on Thursday. Chinese plywood manufacturer Steed Oriental Holdings Co. surged more than fivefold on the first day of trading. Mainland Chinese stocks markets were due to reopen on Wednesday.

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