Hong Kong Market falls on profit booking

The Hong Kong share market declined for the first time in seven sessions in row on Tuesday, 25 June 2019, as investors locked in profits after a quiet Wall Street session with all eyes on a heavily anticipated US-China meeting at the Group of 20 summit later this week. . Market sentiment was also impacted by reports noting three of them have been spotlighted in a US probe of alleged North Korea sanctions violations. At closing bell, the Hang Seng Index dropped 1.15%, or 327.02 points, to 28,185.98. The Hang Seng China Enterprises Index was down 1.92%, or 210.53 points, to 10,742.41.

The main event this week (Fri-Sat) is the G20 meeting in Japan and in particular the potential meeting between Presidents Donald Trump and Xi Jinping on the sidelines. The two leaders are expected to discuss the protracted trade fight between their two countries. China and the U.S. have already slapped tariffs on billions of dollars worth of each other's goods over the past year. In May, the two economic powerhouses hiked tariffs targeting some goods. The Trump administration has said previously that Trump is ready to raise tariffs on all Chinese imports into the U.S. if the two countries fail to arrive at a deal.

 

Chinese Vice Premier Liu He conversed with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin on Monday ahead of talks between Xi and Trump later this week.

China's Ministry of Commerce said in a statement on Tuesday that the country's Vice Premier Liu He had a phone call with U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer on Monday. They discussed trade and agreed to maintain communications, according to the statement.

Meanwhile, the U.S. on Monday imposed sanctions on Iran over the latter's shooting down of an unmanned American drone last week. Tensions between the two countries have remained high since a recent attack on oil tankers near the Strait of Hormuz.

Chinese banking stocks fell as more lending to small firms, vulnerable to an economic slowdown, raised concerns of strains on the balance sheets of lenders. Banks also came under pressure after a report noting three of them have been spotlighted in a US probe of alleged North Korea sanctions violations. Industrial and Commercial Bank of China (1398 HK) was down 1.32% at HK$5.60, China Construction Bank (939 HK) fell 1.21% to HK$6.51, and Bank of China was down 1.22% at HK$3.23. The Bank of Communications (3328 HK) lost 3.71% to HK$5.95; while China Merchant Banks (3968 HK) plunged 7.67% to HK$38.5.

Main board debutante Jinxin Fertility Group (1951 HK), ended at HK$9.28, lower than its opening at HK$9.90, or 15.9% higher than its offer price at HK$8.54 at market opening.

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