HK Stock Market Move | Multiple factors disrupt construction machinery stocks; SANY INT'L (00631) drops over 7%, hitting a new low for the month.

Construction machinery stocks continued to weaken. As of press time, SANY INT'L (00631) fell 7.21% to HK$8.62; Sany Heavy Industry (06031) dropped 1.95% to HK$18.1; ZOOMLION (01157) declined 0.78% to HK$5.735. On the news front, CMBI stated that the construction machinery sector came under pressure yesterday. It is understood that the market is concerned about: Federal Reserve rate hikes affecting overseas engineering demand; weak latest machinery sales data; and the U.S. launching anti-dumping and countervailing duty (AD/CVD) investigations into linear hydraulic cylinders (and components) originating from China, Canada, Mexico, South Korea, and India. The bank noted that regarding interest rate concerns, overseas engineering projects are generally insensitive to U.S. interest rates, as many of them are sovereign projects supported by the budgets of various governments as well as projects funded by Chinese overseas investment. Regarding weak industry data, all three companies emphasized that overseas orders and demand remained solid in the third quarter. As for the AD/CVD investigations, Hengli believes the impact is manageable, as the company does not compete on low prices in the U.S. market, and production allocation across its global capacity will help mitigate potential impacts.