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Hong Kong stocks retreat from decade peak on tech profit-taking
November 8, 2017 / 8:30 AM / 12 days ago

Hong Kong stocks retreat from decade peak on tech profit-taking

Nov 8 (Reuters) - Hong Kong stocks retreated from a 10-year peak on Wednesday as investors took profit from a rally in tech stocks although the red-hot debut by digital publisher China Literature kept sentiment in the wider market buoyant.

The Hang Seng index dropped 0.3 percent, to 28,907.60 points, while the Hong Kong China Enterprises Index lost 0.6 percent, to 11,576.13. Earlier in the session, the HSI rose by as much as 0.5 percent to its highest since December 2007.

In the spotlight was the stellar debut of China Literature , the online publishing arm of Chinese tech giant Tencent Holdings Ltd.

The stock rose to as much as HK$100 in early trade, compared with its initial public offering (IPO) price of HK$55 per share, underscoring investor eagerness for tech stocks. It closed at HK$102.

Analysts said the successful IPOs of “new economy” stocks such as China Literature and Zhongan Online P&C Insurance Co could instil fresh life into a market traditionally dominated by banking and property giants.

“More and more ‘new economy’ stocks are being warmly embraced by investors ...and are gradually changing the market structure,” said Stanley Chan, head of research at Emperor Securities Ltd.

Bullish sentiment pushed Tencent to a fresh record in the morning, but profit-taking in late trading, pushing the index heavyweight down 1.1 percent at close, sending the technology sector into negative territory.

Chan of Emperor Securities said the Hong Kong market still has room to rise, having shrugged off fears of additional rate hikes in the U.S, as well as concerns of slower economic growth in China, and stock valuation is still modest by global standards. (Reporting by Samuel Shen and John Ruwitch; Editing by Sam Holmes)

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