Hong Kong stocks fell by the most in a week after oil prices surged to the highest level since September 2008, raising concern more expensive energy costs will derail global economic growth.
Cathay Pacific Airways Ltd., the city’s biggest airline, declined 2.6 percent after crude prices rallied above $100 a barrel on concern turmoil in the Middle East will spread from Libya to Iran. Developers sank on concern inflation will accelerate, prompting China’s government to take more steps to curb higher prices. Sands China Ltd. tumbled 6.3 percent after its majority shareholder said it faced investigations by U.S. authorities.
The Hang Seng Index slid 1.9 percent to 22,955.87 as of 3:21 p.m. local time, the steepest decline since Feb. 22. All but two stocks fell in the 45-member gauge. The Hang Seng China Enterprises Index of H shares of Chinese companies lost 1.3 percent to 12,456.16.
“If we have oil prices above $100 a barrel for another two or three months” there is a risk of a big dent in consumer spending, Hans Goetti, chief investment officer for Asia at Finaport Investment Intelligence told Bloomberg Television. “If you have an oil shock and rising oil prices, we always had a recession, at least in previous cycles.”
Shipping and airlines declined after surging oil prices damped their profit outlook. China Cosco Holdings Co., Asia’s largest shipping line by market value, sank 1.7 percent to HK$8.17, and Cathay Pacific dropped 2.6 percent to HK$17.84. China Southern Airlines Co., the nation’s biggest carrier, sank 3.6 percent to HK$3.60 and Air China Ltd., the country’s No. 1 international airline, declined 3.1 percent to HK$7.20.
Oil Surges
Crude oil for April delivery advanced as much as 1 percent to $100.64 a barrel in New York. Futures yesterday surged 2.7 percent to the highest September 30, 2008, as Libyan rebels braced for renewed clashes with forces loyal to leader Muammar Qaddafi and after Al Arabiya television reported Iranian protesters clashed with security forces in Tehran.
Developers had the biggest decline among the Hang Seng Index’s four industry groups. China Overseas Land & Investment Ltd., controlled by the nation’s construction ministry, retreated 1.2 percent to HK$13, while China Resources Land Ltd., a state-controlled developer, lost 1.4 percent to HK$12.52. Shimao Property Holdings Ltd., which gets all its revenue from China, fell 1.3 percent to HK$10.52 after Credit Suisse Group AG cut its rating on the stock to “neutral” from “outperform.”
“Imported inflationary pressure is increasing in China now with oil prices surging,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “That’ll cause concerns the government will further tighten measures to curb inflation.”
Sands China
The Hang Seng Index rose 1.6 percent this year through yesterday as positive corporate earnings eased concern tighter monetary policy in China and unrest in the Middle East will derail global growth. Shares in the gauge traded at an average 12.6 times estimated earnings yesterday, according to data compiled by Bloomberg.
Sands China tumbled 6.3 percent to HK$17.84 after its majority shareholder, billionaire Sheldon Adelson’s casino company, said it faced investigations from the U.S. Securities and Exchange Commission and the Justice Department.
China Railway Construction Corp. dropped 7.5 percent to HK$8.11 after the builder of more than half the nation’s railroads said it halted work on three construction contracts in Libya, which have a combined value of $4.24 billion, and has evacuated most of its workers.
Among stocks that rose, BYD Co., the Chinese carmaker part- owned by Warren Buffett, surged 9.2 percent to HK$33.30 after the Financial Times reported it plans to start selling electric and hybrid cars in Europe by the end of next year, citing Wang Chuanfu, the company’s chairman.
Futures on the Hang Seng Index lost 2.1 percent to 22,892. The HSI Volatility Index, the benchmark gauge for Hong Kong stock options, gained 9.9 percent to 19.06, indicating options traders expect a swing of 5.5 percent in the Hang Seng Index in the next 30 days.
Source: http://www.bloomberg.com
Cathay Pacific Airways Ltd., the city’s biggest airline, declined 2.6 percent after crude prices rallied above $100 a barrel on concern turmoil in the Middle East will spread from Libya to Iran. Developers sank on concern inflation will accelerate, prompting China’s government to take more steps to curb higher prices. Sands China Ltd. tumbled 6.3 percent after its majority shareholder said it faced investigations by U.S. authorities.
The Hang Seng Index slid 1.9 percent to 22,955.87 as of 3:21 p.m. local time, the steepest decline since Feb. 22. All but two stocks fell in the 45-member gauge. The Hang Seng China Enterprises Index of H shares of Chinese companies lost 1.3 percent to 12,456.16.
“If we have oil prices above $100 a barrel for another two or three months” there is a risk of a big dent in consumer spending, Hans Goetti, chief investment officer for Asia at Finaport Investment Intelligence told Bloomberg Television. “If you have an oil shock and rising oil prices, we always had a recession, at least in previous cycles.”
Shipping and airlines declined after surging oil prices damped their profit outlook. China Cosco Holdings Co., Asia’s largest shipping line by market value, sank 1.7 percent to HK$8.17, and Cathay Pacific dropped 2.6 percent to HK$17.84. China Southern Airlines Co., the nation’s biggest carrier, sank 3.6 percent to HK$3.60 and Air China Ltd., the country’s No. 1 international airline, declined 3.1 percent to HK$7.20.
Oil Surges
Crude oil for April delivery advanced as much as 1 percent to $100.64 a barrel in New York. Futures yesterday surged 2.7 percent to the highest September 30, 2008, as Libyan rebels braced for renewed clashes with forces loyal to leader Muammar Qaddafi and after Al Arabiya television reported Iranian protesters clashed with security forces in Tehran.
Developers had the biggest decline among the Hang Seng Index’s four industry groups. China Overseas Land & Investment Ltd., controlled by the nation’s construction ministry, retreated 1.2 percent to HK$13, while China Resources Land Ltd., a state-controlled developer, lost 1.4 percent to HK$12.52. Shimao Property Holdings Ltd., which gets all its revenue from China, fell 1.3 percent to HK$10.52 after Credit Suisse Group AG cut its rating on the stock to “neutral” from “outperform.”
“Imported inflationary pressure is increasing in China now with oil prices surging,” said Wei Wei, an analyst at West China Securities Co. in Shanghai. “That’ll cause concerns the government will further tighten measures to curb inflation.”
Sands China
The Hang Seng Index rose 1.6 percent this year through yesterday as positive corporate earnings eased concern tighter monetary policy in China and unrest in the Middle East will derail global growth. Shares in the gauge traded at an average 12.6 times estimated earnings yesterday, according to data compiled by Bloomberg.
Sands China tumbled 6.3 percent to HK$17.84 after its majority shareholder, billionaire Sheldon Adelson’s casino company, said it faced investigations from the U.S. Securities and Exchange Commission and the Justice Department.
China Railway Construction Corp. dropped 7.5 percent to HK$8.11 after the builder of more than half the nation’s railroads said it halted work on three construction contracts in Libya, which have a combined value of $4.24 billion, and has evacuated most of its workers.
Among stocks that rose, BYD Co., the Chinese carmaker part- owned by Warren Buffett, surged 9.2 percent to HK$33.30 after the Financial Times reported it plans to start selling electric and hybrid cars in Europe by the end of next year, citing Wang Chuanfu, the company’s chairman.
Futures on the Hang Seng Index lost 2.1 percent to 22,892. The HSI Volatility Index, the benchmark gauge for Hong Kong stock options, gained 9.9 percent to 19.06, indicating options traders expect a swing of 5.5 percent in the Hang Seng Index in the next 30 days.
Source: http://www.bloomberg.com
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