SHANGHAI, Aug 28: Concerns over a possible U.S.-led military strike on Syria took a toll on Chinese equity markets on Wednesday, as did the resignations of key executives at index heavyweight Petrochina, with all key indexes sinking alongside regional peers.
Hong Kong’s Hang Seng Index was down 1.7 percent at midmorning to 21494.28, while the sub-index of Hong Kong-listed China enterprises underperformed, losing 2.5 percent.
Mainland indexes also slid but continued their recent trend of outperforming regional peers. The CSI300 Index lost 0.6 percent in the morning session, while the Shanghai Composite Index declined 0.2 percent to 2,098.52.
Global investors have been rattled by signs that the U.S. Is preparing to attack Syria soon, in response for the alleged use of chemical weapons against rebels, depressing equity indexes and pushing up the price of oil.
In addition, investors have begun to bail out of shares in mainland energy giant Petrochina and its subsidiary Kunlun Energy after reports that key executives were under investigation for ‘severe breaches of discipline.’
Shares in Hong Kong-traded Kunlun Energy were down 11.4 percent at midday, while Petrochina constituted the largest drag on the Shanghai Composite Index.
Shares in firms expected to benefit from the new Shanghai Free Trade Zone continued to outperform, pulling up the transportation and storage sub-index, as did shares in Zhongjin Gold and Shandong Gold.
Chen Huiqin, senior analyst at Huatai Securities in Nanjing, noted that the moves are not yet particularly drastic.
‘Overall, the Chinese market has not yet walked out of a range-bound trading trend seen over the past several weeks. We expect the Shanghai Composite Index to continue moving in the range of 2,050 to 2,130 points in the near term.’
Banking and insurance shares remained a drag on mainland indexes, in particular shares in commercial banks including China Minsheng Bank , Ping An Bank and others.
Major state-owned giants including China Construction Bank , Industrial and Commercial Bank of China (ICBC)
And the Agricultural Bank of China weighed heavily on the Hang Seng index, as did shares in energy majors.
Good news from Air China Ltd. Was not enough to lift its shares, which sank 2.91 percent in Hong Kong despite signs that it is outperforming its peers in terms of overseas expansion.
(AGENCIES)
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