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Hong Kong shares slip, hurt by China Mobile even as Chinese airlines surge

Hong Kong shares slip, hurt by China Mobile even as Chinese airlines surge

Hong Kong shares dipped Monday, dragged down by China Mobile, even as Chinese airline shares surged, sparked by news that China Southern Airlines expects to report a full-year profit for the first time in several years.
The benchmark Hang Seng Index ended the session down 44.45 points, or 0.2 percent, to finish at 20,236.68.
China Southern Airlines _ the nation's largest by fleet size _ surged 7.3 percent to HK$3.70. The airline said its earnings outlook was boosted by the strong domestic economy and the continued appreciation of the Chinese yuan.
China Eastern Airlines also rose on the back of China Southern's announcement, with its shares up 3.7 percent while Air China gained 3.1 percent.
Among blue chips, heavyweight China Mobile lost 1.2 percent to HK$71.75, falling for the third day on continued placement concerns, analysts said.
The China Enterprises Index, which tracks the movement of H share stocks _ Hong Kong-listed shares of companies registered and based on the mainland _ rose 0.2 percent to 9,676.12 points. However, the gains failed to lift the Hang Seng Index, which has fallen nearly 3 percent since Wednesday.
"Many investors are holding off trades ahead of Tuesday's January futures expiry and on concerns of a major correction in Shanghai A shares in the coming weeks since the market has been heavily overbought," said Peter Lai, a director at DBS Vickers.
Analysts also said that investors are staying on the sidelines before the two-day U.S. Federal Reserve interest rate meeting scheduled to start Tuesday. Hong Kong interest rates tend to move with U.S. rates because the local currency is pegged to the U.S. dollar.
Philip Chan, head of research at CAF Securities, said that the key point to watch from the Fed is its outlook on the economy, rather than on rates.
"If the Fed view is positive, the HSI can climb above 20,500 later this week," said Chan.
Monday's market turnover totaled HK$36.98 billion (US$4.73 billion; euro 3.67 billion), down sharply from HK$60.15 billion on Friday.
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Updated : 2021-02-27 21:27 GMT+08:00