Hong Kong shares fall; worst week for Hang Seng since February

China, Hong Kong stocks end sharply lower as trade war, weaker confidence bite.

HONG KONG: Hong Kong shares edged lower on Friday, dragged down by fears of slowing growth in China, a vaccine scandal that weighed on healthcare shares and persistent worries over the Sino-U.S. trade war.

The Hang Seng index fell 0.1 percent to 27,676.32, while the China Enterprises Index lost 0.4 percent to 10,693.79.

The Hang Seng fell 3.9 percent for the week, its worst weekly performance since February.

China's services sector expanded at the weakest pace in four months in July, as there was the least growth in new business since December 2015, a private survey showed on Friday. 

On Friday, a high-level government body said China must balance steady economic growth and risk prevention at a time when external uncertainties are increasing, and more attention needs to be paid to the "transmission" of monetary policy. 

Some analysts also believe consumer firms are suffering from a "crisis of confidence" spreading from healthcare companies after a recent vaccine safety scandal sparked widespread anger and prompted investors to cut their exposure.

The Hang Seng healthcare sub-index fell 3 percent. 

China vowed to retaliate if the United States acted on a threat to raise tariffs on the Asian nation's exports, fuelling fears in financial markets that the trade war between the world's two biggest economies would escalate.

The sub-index of the Hang Seng tracking energy shares dipped 0.5 percent while the IT sector rose 0.55 percent, the financial sector was 0.05 percent lower and property sector dipped 0.69 percent.

 The top gainer on Hang Seng was Swire Pacific Ltd up 1.43 percent, while the biggest loser was CSPC Pharmaceutical Group Ltd which was down 4.10 percent. 

 China's main Shanghai Composite index closed down 0.97 percent at 2,768.0239 while its bluechip CSI300 index ended down 1.65 percent.

The yuan was quoted at 6.859 per U.S. dollar at 08:25 GMT, 0.31 percent weaker than its previous close of 6.8381. 

As of the previous trading session, the Hang Seng index was down 7.37 percent this year, while China's H-share index was down 8.3 percent. 

The top gainers among H-shares were PICC Property and Casualty Co Ltd up 3.99 percent, followed by Tencent Holdings Ltd gaining 1.39 percent and CITIC Ltd up by 0.37 percent. 

The three biggest H-shares percentage decliners were Air China Ltd which was down 5.06 percent, Byd Co Ltd which fell 4.8 percent and Great Wall Motor Co Ltd down by 4.6 percent.

About 1.66 billion Hang Seng index shares were traded, roughly 86.7 percent of the market's 30-day moving average of 1.91 billion shares a day. The volume traded in the previous trading session was 2.05 billion. 

At close, China's A-shares were trading at a premium of 15.88 percent over the Hong Kong-listed H-shares. 

The price-to-earnings ratio of the Hang Seng index was 10.86 as of the last full trading day while the dividend yield was 3.4 percent. 

The short and one-factor leveraged Hang Seng index, which is designed to replicate the payoff of a short or leveraged portfolio and is linked to the movements of the Hang Seng Index, was higher by 0.14 percent on the day at 5,109.55. - Reuters