Stocks head south as Meituan bucks trend

Staff reporter

Meituan (3690) jumped nearly 5 percent ahead of a US$2 billion (HK$15.6 billion) share buyback announcement, bucking the overall downtrend in Hong Kong's stock market, which was hit by declines in shipping and gold stocks.

Meanwhile, the onshore yuan dropped to 7.2541 against the US dollar yesterday, a nearly seven-month low.

The Hang Seng Index closed 190 points lower at 18,176 yesterday after trading resumed following the Dragon Boat Festival holiday.

In China, the Shanghai Composite Index dropped 0.8 percent. But Timothy Moe, chief Asia-Pacific strategist at Goldman Sachs said there is still room for Chinese stocks to rise further after a recent healthy correction.

In Hong Kong, Meituan surged 4.4 percent to close at HK$115.3 yesterday, the biggest winner among blue chips.

The food delivery giant confirmed after the market closed that it plans to repurchase up to US$2 billion worth of its shares from time to time in the open market. The firm added it believes that its current financial resources would enable it to implement the repurchase while maintaining a solid financial position.

Meanwhile, shipping company Orient Overseas (International) (0316) tumbled 9.4 percent, the worst-performing stock among blue chips.

Gold miner Zijin Mining (2899) sank 4.9 percent after gold prices edged lower as China's central bank didn't buy any gold last month, ending a massive buying spree that ran for 18 months.

Samsonite (1910) jumped 4.3 percent amid news of a US$200 million share buyback, before closing aslightly higher at HK$24.50.

Trading in Dexin China (2019), meanwhile, was halted as a Hong Kong court issued a wind-up order against the developer.