HK stocks close weaker on trade war jitters, Fed caution

Hengan International

20/03/2019 08:41

* Hang Seng lost 0.2 pct, H-shares down 0.5 pct
    * Fed decision pending, caution in global markets
    * Beijing and Washington to resume trade talks

    HONG KONG, March 20 (Reuters) - The Hong Kong stock market
ended lower on Wednesday as investors kept a cautious stance
ahead of the U.S. Federal Reserve's policy decision later in the
day and on reports of renewed tension in U.S.-China trade
negotiations.
        
** The Hang Seng index  .HSI  closed 0.5 percent weaker at
29,320.97 points. The Hang Seng China Enterprises index  .HSCE 
ended down 0.5 percent.
** The sub-index of the Hang Seng tracking energy shares
 .HSCIE  ended down 0.5 percent, while the IT sector  .HSCIIT 
dipped 0.6 percent, the financial sector  .HSNF  ended 0.8
percent lower and property shares  .HSNP  lost 0.5 percent.
** Investors' immediate focus was on the Fed to see whether the
central bank will affirm its commitment to "patient" monetary
policy and for clues about the likely path of U.S. borrowing
costs.    
** The U.S. Federal Reserve is due to announce its decision on
interest rate later on Wednesday.  FED/DIARY     
** The central bank will remain patient for a little longer than
thought last month, waiting until the third quarter before
raising rates once more, and then stay on the sidelines, a
Reuters poll of economists showed.  urn:newsml:reuters.com:*:nL1N215055
** But "there is the risk of a communication mistake ... that
the Fed accidentally sends the message it is very worried about
the U.S. and global outlook, and that the next move is in fact a
rate cut," Thomas Costerg, a senior U.S. economist at Pictet
Wealth Management, said in a note this week. 
** Meanwhile, market players held on to hopes of a trade deal
between Washington and Beijing as officials from both sides
remained locked in negotiations.
** U.S. Trade Representative Robert Lighthizer and Treasury
Secretary Steven Mnuchin plan to travel to China next week for a
new round of trade talks with Chinese Vice Premier Liu He, a
White House official said on Tuesday.  urn:newsml:reuters.com:*:nL1N21617G    
** Trading volume in Hong Kong thinned ahead of Fed decision.
About 1.63 billion Hang Seng index shares were traded. The
volume traded in the previous trading session was 1.80 billion,
and 1.95 billion in the session before that.
** The top gainer on the Hang Seng was Hengan International
Group Co Ltd  1044.HK , which ended up 5.4 percent, while the
biggest loser was Sino Biopharmaceutical Ltd  1177.HK , which
closed 3.4 percent lower.
** China's main Shanghai Composite index  .SSEC  and the
blue-chip CSI300 index  .CSI300  were both flat.
** Around the region, MSCI's Asia ex-Japan stock index
 .MIAPJ0000PUS  was weaker by 0.2 percent, while Japan's Nikkei
index  .N225  closed up 0.2 percent.
** At close, China's A-shares were trading at a premium of 24.21
percent over the Hong Kong-listed H-shares.  .HSCAHPI 
** The short and one-factor leveraged Hang Seng index  .HSISI ,
which is designed to replicate the payoff of a short or
leveraged portfolio and is linked to the movements of the Hang
Seng Index, was higher by 0.5 percent on the day at 4,691.77
points.

 (Reporting by Noah Sin, Editing by Sherry Jacob-Phillips)
 ((noah.sin@thomsonreuters.com; Reuters Messaging:
noah.sin.thomsonreuters.com@reuters.net))