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Shanghai - Chinese shares listed in Hong Kong fell the most in two weeks, dragged down by energy companies on a plunge in oil prices. Great Wall Motor Co. slumped the most since January as its net income was seen missing estimates.
The Hang Seng China Enterprises Index lost 1.2% as of 08:33, with China Petroleum & Chemical and China Oilfield Services among the biggest decliners as crude sank for a third day on speculation Russia won’t join OPEC’s planned output cuts.
Great Wall Motor tumbled 10% amid a series of rating downgrades, with Sanford C Bernstein & Co saying the automaker’s third-quarter net income missed estimates. The Shanghai Composite Index was set to end three days of gains that took it to its highest level since January.
The H-share gauge has slipped more than 3% since reaching a nine-month high in September as inflows from mainland investors through a link with Shanghai slowed to less than $1bn so far in October, from a record $8bn in September.
The People’s Bank of China is planning to add extra oversight to lenders’ off-balance-sheet wealth management products, a pool that Citigroup estimates at 13 trillion yuan. Reported curbs on the use of WMP proceeds to buy equities sparked a stock plunge in late July.
"The momentum on H shares is receding now as stocks have already been pushed to a relatively high level,” said Wei Wei, an analyst at Huaxi Securities in Shanghai. "The appeal is dwindling. The economy isn’t likely to pick up significantly this year and it’s still in an L-shaped range."
The Hang Seng China Enterprises Index traded at 9 722.16. The Hang Seng Index lost 0.7%, while the Shanghai Composite Index dropped 0.5%.
Early indicators of China’s economy for October have presented a mixed picture, with confidence among small and medium-sized companies holding up, while larger firms are less confident in the outlook.
With the economy expanding at 6.7% in the first three quarters, policy makers are pledging to curb debt expansion and rein in surging home prices in the nation’s biggest cities. The ruling Communist Party is meeting this week in Beijing, and the focus so far has been on Xi Jinping’s anti-graft fight.
China Petroleum & Chemical, also known as Sinopec, and China Oilfield Services fell at least 1.6%. Oil futures declined as much as 1.5% in New York after closing below $50 a barrel on Tuesday for the first time in more than a week.
Belle International extended a two-day drop to 13% as UBS Group AG said the inventory of the women’s footwear retailer is at an “ alarming level.”
Great Wall, China’s biggest maker of SUVs, fell the most since January 29. The stock had its ratings downgraded at JPMorgan and Nomura even after the automaker posted a 53% increase in third-quarter earnings. Nomura cited narrowing gross profit margins and disappointing sales volumes of SUVs.
In mainland trading, coal stocks provided the biggest drag on the market with an index of energy firms falling 1.4% for the biggest decline among industry groups. Shaanxi Coal Industry retreated 4.3% after jumping 20% over the past two days. China Coal Energy slid 3.7%, snapping a two-day, 18% gain.
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