Tencent slumped on Friday, putting it in line for its worst week in almost two years, as investors took profit in global technology shares and before the stock’s weighting gets reduced in Hong Kong’s benchmark index.
Tencent declined as much as 2.9% in a sudden drop before trimming losses to 2% as of 11.36am in Hong Kong. The stock has lost 6.1% this week, the most on that basis since February last year. Its weighting on the Hang Seng Index will fall to 10% from 11.7% after the close as part of a quarterly rebalancing by the compiler.
Johannesburg-listed Naspers owns 33.2% of Tencent.
The shares hit a record high last month, but they’ve come off in recent days, falling 9.3% since the middle of last week. Still, Tencent was the best performer on the Hang Seng Index in November, adding 14% as its market capitalisation exceeded US$500bn and topped that of Facebook.
“Tencent is tracking losses in the global technology sector,” said Julia Pan, a Shanghai-based analyst at UOB Kayhian. Asian technology shares followed US tech stocks lower on Thursday, signalling a rotation away from the year’s leaders into financial companies.
Cathay Pacific Airways and Kunlun Energy will be dropped from Hong Kong’s benchmark when the rebalancing takes effect. Cathay, which has been a member of the gauge for decades, slid 1.7% on Friday, while Kunlun Energy advanced 1.8%.
Chinese property developer Country Garden Holdings and Apple supplier Sunny Optical Technology Group will take their places on the benchmark. Country Garden advanced as much as 6.2% before paring gains to 2.9%, while Sunny Optical’s shares were little changed. — Reported by Moxy Ying, with assistance from Robin Ganguly, (c) 2017 Bloomberg LP
