Update | Hong Kong stocks fall for third day to close at 4-month low
Shanghai shares retreat as yuan borrowing costs continue to surge amid tight liquidity
Hong Kong stocks fell Monday for a third straight session to close at their lowest level in more than four months.
Analysts said capital outflow pressure persisted after the Federal Reserve added one more rate increase to its 2017 outlook, while traders were reluctant to increase positions as the holiday season nears.
Shanghai and Shenzhen shares also pulled back, as yuan borrowing costs among commercial banks continued to surge amid tight liquidity in mainland China.
Hong Kong’s benchmark Hang Seng Index declined 0.9 per cent or 188.07 points to close at 21,832.68, the worst level it has seen since August 4. The index has fallen for three straight sessions. The Hang Seng China Enterprises Index, known as the H-shares index, ended 1 per cent or 92.9 points lower at 9,377.43.
Turnover for Hong Kong markets dropped sharply to HK$56 billion, down 22 per cent from HK$72 billion at the end of last week.
“As US rates head higher, Hong Kong stocks could face further pressure as capital flows out of the market,” said Ben Kwong Man-bun, executive director of KGI Asia.