Winners and losers as HSI review lifts market

Hong Kong stocks reached a nearly four-week high after the latest quarterly review of the Hang Seng Index, but some blue-chip stocks which will soon be excluded from the benchmark fell.

The HSI closed 164 points, or 0.65 percent, higher at 25,347 points yesterday, paring a 1.6 percent gain.

Local developer Sino Land (0083) fell 3.77 percent to HK$9.19 and mainland snack retailer Want Want China (0151) dropped 3.23 percent to HK$5.69.

China Shenhua Energy (1088) inched up by 1.24 percent to HK$13.02. Shares of the three companies will cease to be HSI constituents from September 7.

Meanwhile, for the new joiners, Xiaomi (1810) surged as much as 8.6 percent before paring gains, closing at HK$16.20, but Alibaba (9988) was still trading 1.62 percent lower at HK$242.80.

That came after US President Donald Trump said he could exert pressure on more Chinese companies, including the e-commerce giant. Wuxi Biologics (2269) climbed 4.71 percent to HK$169.

Meituan Dianping (3690), which took the market by surprise as it was not included in the HSI but only the Hang Seng China Enterprises Index, dipped 0.73 percent lower to HK$218.20.

Shares of mainland financial stocks rallied, with China Life Insurance Company (2628) rising by 5.17 percent to HK$20.15, leading the blue-chip gains.

Elsewhere, China Rare Earth (0769) rose 6.38 percent following media reports that Chinese rare earth exports plunged by 69 percent year-on-year in July, which may affect the production of handsets and other electronics, and was expected to intensify the Sino-US tensions.

A survey on 1.2 million mainland Weibo users has found that more than 90 percent of the respondents will give up using iPhones rather than give up WeChat, raising concerns about Apple's sales in the mainland. Some worried that Disney and Starbucks may also be affected. However, Trump said it does not matter.

In other news, market research company International Data Corporation forecasts the total expenditure on internet security will grow 11 percent year-on-year to US$7.89 billion in 2020, and will further rise at a compound annual growth rate of 18.7 percent to US$16.72 billion in 2024.