Hong Kong, mainland shares slip as China’s forex reserves drop to nearly six-year low

Hong Kong and mainland stocks opened lower after the Chinese central bank again skipped injecting more liquidity into the system, and China’s foreign exchange reserves dropped to a nearly six-year low.

The Hang Seng Index opened down 0.58 per cent or 135.75 points lower at 23,195.82, and the Hang Seng China Enterprises index dipped 0.70 per cent or 68.68 points to 9,777.38 in early trading.

Mainland China shares also slipped after the People’s Bank of China said it would skip open market operations to inject cash into the banking system for a fourth trading day, citing high overall liquidity.

The Shanghai Composite Index was down 0.24 per cent or 7.46 points to 3,145.63 while the blue-chip CSI 300 lost 0.15 per cent or 4.97 points to 3,360.72.

The Shenzhen Component Index edged down 0.12 per cent or 11.96 points to 10,043.61, and the Nasdaq-style ChiNext fell 0.09 per cent or 1.79 points to 1,887.34.

The Chinese central bank set the yuan reference point against the US dollar at 6.8849, 245 basis points weaker than Tuesday and the weakest since January 17. The onshore exchange rate is allowed to move up to 2 per cent either side of the reference point daily.

China’s foreign exchange reserves fell below the psychological threshold of US$3 trillion in January, the first time since early 2011, official data showed on Tuesday.

Energy stocks continued their drops on lower oil prices. In Hong Kong, PetroChina opened down 0.66 per cent to HK$6.01 while Sinopec dropped 0.99 per cent to HK$6.02. CNOOC was down 0.93 per cent to HK$9.56.

Overnight in the US, the Nasdaq closed at a record high after a 0.19 per cent rise to 5,674.22. The Dow Jones Industrial Average closed 0.19 per cent up to 20,090.29 after hitting an intraday all-time high.

The S&P 500 climbed 0.02 per cent to 2,293.08, its gains limited by energy giants. Oil price further declined after data showed an increase in US inventories.

Other Asian markets opened mixed on Wednesday. Tokyo’s Nikkei 225 slipped 0.13 per cent to 18,934.74 in early trading as the yen strengthened against the greenback.

Australia’s S&P/ASX 200 gained 0.20 per cent to 5,633.40 while South Korea’s Kospi dropped 0.59 per cent to 2,062.99.

Hong Kong-listed companies with American Depository Receipts (ADRs) showed mixed results at US trading on Tuesday.

HSBC’s ADR closed at HK$66.66 after conversion into Hong Kong dollars, up from the HK$66.20 seen at the Hong Kong Tuesday close. Sinopec’s ADR rose from HK$6.08 to HK$6.99 while CNOOC went down from HK$9.65 to HK$9.58.

(SCMP)