29 de septiembre de 2014 / 14:13 / en 3 años

Hong Kong-exposed shares underperform as European equities fall

* HSBC, Standard Chartered fall as Hong Kong unrest hits markets

* Luxury goods sector also under pressure

* FTSEurofirst 300 falls 0.9 pct

By Sudip Kar-Gupta

LONDON, Sept 29 (Reuters) - Companies exposed to Hong Kong underperformed weaker European stock markets on Monday, as civil unrest in the Asian city hit banks such as HSBC and luxury goods groups such as Richemont.

Hong Kong democracy protesters defied volleys of tear gas and police baton charges to stand firm in the centre of the global financial hub on Monday, in one of the biggest political challenges for Beijing since the Tiananmen Square crackdown 25 years ago.

Banks in Hong Kong, including HSBC, Citigroup , Bank of China, Standard Chartered and DBS, temporarily shut some branches and advised staff to work from home or go to secondary branches.

Standard Chartered fell by 2.3 percent, while HSBC retreated by 2.5 percent, making those two banks among the worst-performing stocks on the broader, pan-European FTSEurofirst 300 index, which was down 0.9 percent at 1,364.06 points.

The luxury goods sector was also impacted by the unrest in Hong Kong, since many of the companies in the sector have targeted a growing affluent Chinese clientele in recent years.

Swiss luxury goods group Richemont fell 1.7 percent while French rival LVMH declined by 2 percent.

“The Hong Kong situation, combined with the fact that the month of October is traditionally a weak period for stock markets, is adding to an environment that is not supportive for equities,” said Francois Savary, chief investment officer at Swiss bank Reyl.

ECB TO CUSHION LOSSES

Athens’ benchmark equity index also fell 2.9 percent, as Attica Bank slumped by 11.9 percent to trade near record lows, a day before the company seeks shareholder approval for a plan to issue new shares and raise up to 434 million euros ($550.1 million) to plug a capital shortfall.

Savary added, however, that he felt that any market pullback caused by the Hong Kong situation would be cushioned by expectations of new economic stimulus measures from the European Central Bank (ECB).

“I think that the general environment is tilting more towards a consolidation, rather than a correction. The ECB will continue to inject liquidity into the system,” said Savary.

Morgan Stanley’s European equity strategists also thought the ECB would help support the region’s stock markets, with the ECB’s expected new stimulus measures offering a contrast to the U.S. Federal Reserve and Bank of England, which are expected to start raising interest rates soon.

“We believe investors should be overweight European exposure in their portfolio in anticipation of better macro news flow and a more aggressive ECB relative to the Fed and BoE,” said Morgan Stanley European equity strategist Graham Secker.

The FTSEurofirst 300 index remains up by around 4 percent since the start of 2014. The index hit a peak of 1,410.93 points on Sept. 19, which marked its highest level since early 2008, but has since eased back from that rally.

Europe bourses in 2014: link.reuters.com/pap87v

Asset performance in 2014: link.reuters.com/gap87v

Today’s European research round-up (additional reporting by Francesco Canepa; editing by Susan Thomas and Crispian Balmer)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below