Hong Kong six session rally comes to an end while Shanghai reopens down

Published:  31 Jan at 6 PM

Hong Kong shares broke a winning streak of six sessions yesterday, dragged down by banks and developers for China, as investors made profits on recent outperformers at the same time all eyes remain on Greece debt-swap deal talks.

As reported by Reuters, soft mainland markets that are back in trading after the week-long holiday for Chinese New Year weighed on Hong Kong shortly after Beijing dashed hopes previously held for bank reserve requirements to be reduced over the lengthy holiday. There were also global factors at play, which included tepid U.S. growth figures on Friday that pulled down markets across Asia.

Shanghai's Composite Index dropped 1.5 per cent to fall short of the 2,300 level that it only finished above at the end of its last session. Noticeably, turnover slumped to the lowest experienced in five sessions. Jackson Wong, the vice-president of Tanrich Holdings' equity sales department, told how US data that was weaker-than-expected hasn't been helping with investors watching how Greece's debt swap deal talks will pan out.

Wong added that the outcome of yesterday's summit among European leaders, coupled with fresh US data later on, might spur the rally's resumption. Shares of China-based property developers have also been weak with Poly Real Estate of Shanghai and Shenzhen's China Vanke each losing more than four per cent in strong volumes.

Country Garden Holdings Co Ltd in Hong Kong slumped 11.3 per cent, leading percentage losses amongst Chinese property developers after stock was downgraded from neutral to sell by Citi.