Hong Kong stocks drop, but post best month in nearly 2 years

The Hang Seng index fell 2.1%, to 26,341.49, while the China Enterprises Index lost 2.3%, to 10,546.47.

HONG KONG: Hong Kong stocks fell more than 2% on Monday on worries over China-U.S. tensions, although hopes for a vaccine-led global economic recovery next year, and strong China data helped the market post its best monthly gain in nearly two years.

The Hang Seng index fell 2.1%, to 26,341.49, while the China Enterprises Index lost 2.3%, to 10,546.47.

The Hang Seng energy index slumped 8.7%, led by a 14% tumble in China's national offshore oil and gas producer CNOOC Ltd after news of U.S. blacklisting.

The Trump administration is poised to add China's top chipmaker SMIC and CNOOC to a blacklist of alleged Chinese military companies, according to a document and sources.

For the month, the Hang Seng index gained 9.3%, its best since January 2018, while HSCE added 8.1%, its best since December 2019, helped by robust gains for companies in traditional industries on hopes of an economic recovery.

The Hang Seng materials index jumped 25% for the month, its biggest since April 2015, while the Hang Seng financials index climbed 15%.

Investors could turn their eyes to old economy stocks on prospects of a global economic recovery as some countries sought to vaccinate their people, Guodu Hong Kong said in a report.

China's factory activity expanded at the fastest pace in more than three years in November, while growth in the services sector also hit a multi-year high, as the country's economic recovery from the coronavirus pandemic stepped up.

Upbeat data released on Monday suggests the world's second-largest economy is on track to become the first to completely shake off the drag from widespread industry shutdowns, with recent production data showing manufacturing now at pre-pandemic levels. - Reuters

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