December 27, 2018 / 8:51 AM / 2 years ago

Hong Kong stocks slide on mainland market U-turn

* .HSI down 0.7 pct; .HSCE closes lowest in over 2 years

* Local shares follow Sinopec-inspired fall on the mainland

* Little year-end activity as most investors stay cautious

HONG KONG, Dec 27 (Reuters) - The Hong Kong market tracked the fall in mainland Chinese shares on Thursday, marking its lowest close in almost two months as investors sought to mitigate the damage from a fall in Sinopec shares after the surprise suspension two of its executives. ** The Hang Seng index fell 0.6 percent to 25,478.88 points, its lowest close since Nov. 1, while the Hang Seng China Enterprises index shed 0.7 percent to market its lowest close since May 2017. ** Shares of Sinopec, officially known as China Petroleum & Chemical Corp, dropped after Reuters reported that two top officials at the company have been suspended for inflicting severe losses in trading. The company’s stock in Hong Kong ended 4.7 percent lower. ** The news erased earlier gains in both Chinese and Hong Kong markets and sent the Shanghai Composite Index to its lowest close in four years. Losses were seen across sectors in Hong Kong. The sub-index for the IT sector slid 0.3 percent, the financial sector ended 0.6 percent lower and the property sector dipped 1.1 percent. ** Energy shares, which rose in early trade on Thursday, reversed course to dip 1.3 percent. Oil prices, which rallied and supported to global shares previously, made a U-turn on Thursday amid worries over a glut in crude supply and concerns over a faltering global economy. ** About 1.35 billion Hang Seng index shares were traded, roughly 91.7 percent of the market’s 30-day moving average of 1.48 billion shares a day. ** Most investors are staying on the sidelines and will not return before the New Year, said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong. ** “There is not a lot of interest in buying or selling,” he said. “Those who wanted to sell would have sold already, and those who didn’t sell (during the market rout in October) are not about to sell now.” ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.5 percent, while Japan’s Nikkei index closed up 3.9 percent. ** The yuan was quoted at 6.8662 per U.S. dollar at 08:29 GMT, 0.27 percent firmer than the previous close of 6.8848. ** The three biggest H-shares percentage decliners were Shenzhou International Group Holdings Ltd, which was down 8.3 percent, Sinopec, which fell 4.7 percent, and ZhongAn Online P & C Insurance Co Ltd, down by 4.4 percent. ** At close, China’s A-shares were trading at a premium of 17.94 percent over the Hong Kong-listed H-shares. ** The short and one-factor leveraged Hang Seng index, 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 0.7 percent on the day at 5,433.37 points. (Reporting by Noah Sin; Editing by Sunil Nair)

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