Hong Kong Market ends 0.23% down

Headline indices of the Hong Kong share market closed down on Thursday, 14 February 2019, as investors awaited news from two-day US-China high-level trade negotiations starting today. Market losses were, however, capped on better-than-expected China trade data. At closing bell, the Hang Seng Index fell 65.54 points or 0.23% to 28,432.05. The Hang Seng China Enterprises Index dropped 28.75 points or 0.26% to 11,170.35. Turnover decreased to HK$103.8 billion from HK$121 billion on Wednesday.

China's exports unexpectedly returned to growth in January after a shock decline the previous month, while imports fell much less than expected. China's January dollar-denominated exports rose 9.1% from a year ago, ompared with the previous month's 4.4% decline, according to Chinese customs data. China's imports fell 1.5% over the same period. Imports in December fell 7.6% from a year ago. Thus, China's overall trade surplus of $39.16 billion in January. China's closely watched trade surplus with the U.S. fell to $27.3 billion in January, from $29.87 billion in December. In January, China's exports to the U.S. fell 2.4% from a year ago, while imports from its trade war opponent tanked 41.2% over the same period.

Investors were watching for developments coming out of Beijing today and tomorrow as they sized up positive remarks by US President Donald Trump about trade talks with China. Today, US Secretary of the Treasury Steve Mnuchin and Trade Representative Robert Lighthizer will meet with Chinese officials to try and come up with a deal. They are also scheduled to meet with Xi Jinping.

U.S. tariffs on $200 billion worth of imports from China are scheduled to rise to 25% from 10% if the two sides do not reach a deal by March 1.

On Wednesday, President Trump told reporters at the White House that trade talks with China were going along very well, a comment that came ahead of high-level meetings between Chinese vice premier Liu He and central bank governor Yi Gang, and US trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

The negotiations over the next two days will centre on structural changes demanded by the US of China relating to forced technology transfer, intellectual property protection, non-trade barriers, cyber intrusions and cybertheft among others.

Performance of blue chips was lackluster. HSBC (00005) inched up 0.1% to HK$67.2. HKEX (00388) nudged down 0.4% to HK$257.8. Tencent (00700) dipped 1.7% to HK$341.8. China Mobile (00941) edged up 0.3% to HK$83.4. AIA (01299) rose 0.4% to HK$74.8.

Handset component makers fell after Sunny Optical (02382) issued a profit warning. The stock slid 5% to HK$88.65 becoming the worst blue-chip loser. AAC Technologies (02018) retreated 2.9% to HK$54.6.

Chinese developers were mixed, with China Overseas Land & Investment (00688) rising 2.3% to HK$29.55. But Country Garden (02007) slipped 3.2% to HK$10.84. China Resources Land (01109) dipped 1% to HK$29.85. China Evergrande (03333) also sank 3.6$ to HK$24.2.

Education players were higher after China's State Council launched reforms on vocational education systems. Top Education (01752) surged 20% to HK$0.39. China Xinhua Education (02779) soared 10.7% to HK$2.79. China 21st Century Education (01598) and Minsheng Education (01569) shot up 6.7% to HK$0.96 and HK$1.75.

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