Hong Kong stocks reverse gains on Middle East tensions

Want Want China Holdings

03/01/2020 08:35

* HK->Shanghai Connect daily quota used 4%, Shanghai->HK
daily
quota used 3.9%
    * HSI -0.3%, HSCE -0.6%, CSI300 -0.2%
    * FTSE China A50 -0.5%

    Jan 3 (Reuters) - Hong Kong stocks reversed gains to end
lower on Friday, as investors worried about heightening
geopolitical tensions in the Middle East after a U.S. air strike
at Baghdad airport killed a top Iranian commander.
    But stocks on the island managed to the wrap up the first
week of the new decade higher with a five-week winning streak,
thanks to an accommodative stance by China's central bank and a
thaw in Sino-U.S. trade tensions.  
    ** The Hang Seng index  .HSI  fell 0.3%, to 28,451.50, after
climbing as much as 1.2% to a six-month high, while the China
Enterprises Index  .HSCE  lost 0.6%, to 11,253.55.   
    ** For the week, HSI increased 0.8%, while HSCE moved up
0.5%, both up for the past five weeks in a row. 
    ** Iranian Major-General Qassem Soleimani, head of the elite
Quds Force and top Iraqi militia commander Abu Mahdi al-Muhandis
were killed early on Friday in a U.S. air strike on their
convoy, the Pentagon and Iran said.  urn:newsml:reuters.com:*:nL8N2973J9 
    ** The tensions in the Middle East after the U.S. air strike
was the main reason that knocked Hong Kong stocks off from a
six-month high on Friday, Ample Finance Group analyst Alex Wong
said. 
    ** Besides, market participants also tended to pocket gains
after a recent rally, Wong added.
    ** The benchmark Hang Seng index had advanced 7% in the last
month of 2019 amid signs of progress in Sino-U.S. trade talks.
    ** Investors were expecting a signing of a Phase 1 trade
deal between China and the U.S. on Jan. 15.  urn:newsml:reuters.com:*:nL1N2950CQ 
    ** Beijing's latest stimulative measures also added to
support for the market. 
    ** China's central bank said on Wednesday it was cutting the
amount of cash that all banks must hold as reserves, releasing
around 800 billion yuan ($114.76 billion) in funds to shore up
the slowing economy.  urn:newsml:reuters.com:*:nL4N29607P 
    ** Reuters reported on Friday that China has decided to keep
its inflation target unchanged this year at around 3%,
suggesting policymakers will continue to roll out economic
stimulus gradually and avoid more aggressive measures.
 urn:newsml:reuters.com:*:nL4N2970MG  
    ** Around the region, MSCI's Asia ex-Japan stock index
 .MIAPJ0000PUS  was weaker by 0.18%, while Japan's Nikkei index
 .N225  was down 0.76%.
    ** The yuan  CNY=CFXS  was quoted at 6.9733 per U.S. dollar,
0.13% weaker than the previous close of 6.9643. 
    ** As of 08:08 GMT, China's A-shares were trading at a
premium of 26.62% over the Hong Kong-listed H-shares.

 (Reporting by the Luoyan Liu and Brenda Goh; Editing by
Shailesh Kuber)
 ((luoyan.liu@thomsonreuters.com; Reuters Messaging:
luoyan.liu.thomsonreuters.com@reuters.net))