November 12, 2018 / 8:53 AM / 5 months ago

Hong Kong stocks edge up but tech woes persist

* .HSI and .HSCE both closed up 0.1 pct

* Tech sub index down more than 2 pct despite rally in China

* Investors watching out for key earnings, global events

By Noah Sin

HONG KONG, Nov 12 (Reuters) - Stocks in Hong Kong moved up marginally on Monday, but were left out from the policy-inspired rally seen in the technology sector in the mainland market, as investors in the city appeared cautious ahead of key earnings announcements and global events. ** The main Hang Seng index and the Hang Seng China Enterprises index each ended 0.1 pct firmer. ** Most sub-indices were little changed. Hang Seng’s sub-index tracking energy shares rose 0.4 percent, the financial sector ended 0.4 percent higher and the property sector dipped 0.02 percent. ** Tech stocks were the outliers. Hang Seng’s sub-index for information technology companies slid 2.4 percent. ** The technology sector’s rally in China helped the mainland market recover from a week of losses, thanks to the securities regulator’s move to simplify the process of buying back shares. Many small-caps and tech names have been troubled by pledged share financing as stock prices tanked in October. ** But Chinese tech companies listed in Hong Kong “cannot benefit from the latest policy,” leading their shares in the opposite direction to onshore tech names, said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. ** Tencent Holdings, which is due to report its third quarter earnings on Wednesday, was the second worst performer in the Hang Seng and worst among H-shares on Monday, dropping 3.1 percent. The company’s shares were battered last Friday after a brokerage cut its target price. ** But Yip reckoned that, after the earnings season, investors “will now look to the fundamental question: how well is the economy doing right now? If the economy is doing worse, the declines will not be limited to one sector.” ** Apart from Tencent’s results, a lot of investors are also keeping an eye on the potential shockwaves deriving from European politics, said Steven Leung, director of sales at UOB Kay Hian in Hong Kong. Italy has until Tuesday to submit a revised budget draft for the European Union’s approval, but there are few signs of progress. ** The top gainer on the Hang Seng was China Resources Power Holdings Co Ltd, which gained 5.6 percent, while the biggest loser was AAC Technologies Holdings Inc, which fell 3.3 percent. ** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.5 percent, while Japan’s Nikkei index closed up 0.1 percent. ** The yuan was quoted at 6.9669 per U.S. dollar at 08:32 GMT, 0.16 percent weaker than the previous close of 6.956. ** The top gainers among H-shares were GF Securities Co Ltd up 3.7 percent, followed by ZhongAn Online P & C Insurance Co Ltd, gaining 3.5 percent and Huaneng Power International Inc, up by 3.3 percent. ** At close, China’s A-shares were trading at a premium of 17.9 percent over the Hong Kong-listed H-shares.

Reporting by Noah Sin; Editing by Sunil Nair

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