China’s A shares post biggest yearly loss in five years; Hong Kong ends 2016 up despite market turmoil

China’s stock markets rallied on Friday but failed to recoup full year losses that were the worst in five years, while Hong Kong stocks ended the year in the black despite a year that saw US interest rate rises, a slowing mainland economy and overseas black-swan events such as Brexit and the US presidential election.

Mainland China A shares recorded their biggest yearly loss in five years, following a short-lived circuit breaker system implemented at the beginning of the year and regulatory intervention in the property market.

Meanwhile, Hong Kong’s benchmark Hang Seng Index ended 2016 at 22,000.56, up 0.41 from the start of the year thanks to a 0.96 per cent rally on Friday, the biggest one-day gain in more than a month. In 2015, the index fell 7.16 per cent due to an A-share market rout.

The Hang Seng China Enterprise Index edged up 0.88 per cent to end at 9,394.87, representing a yearly drop of 2.78 per cent, extending its 19.39 per cent loss seen last year.

Trading turnover on Friday remained low at HK$53.78 billion, staying below HK$60 billion for eight consecutive days.

“Chinese funds continue their end of year window dressing whereas international funds are waiting to see the implications of Donald Trump taking over [as president] in the US,” said Andrew Sullivan, managing director for sales trading at Haitong International Securities.

All major sectors rallied on Friday, led by financial, property and mining stocks.