Update | Hong Kong stocks fall to two-year low on Glencore and China growth concerns
Worries about commodities giant and Chinese economy hammer market
Hong Kong stocks finished on Tuesday at their lowest levels in more than two years, as falling commodity prices and worries over China's weakening economy dragged on resource and financial stocks.
The Hang Seng Index fell 3 per cent to end at 20,556.6 points, its lowest level since July 2013. Turnover for the main board reached HK$84.03 billion, compared with Friday's market turnover of HK$69.06 billion. Meanwhile, the H-share index, which tracks Hong Kong-listed Chinese companies, dropped 3 per cent to 9,230.5 points.
Among top percentage decliners, Swiss-based commodities giant Glencore plummeted 29.32 per cent to close at HK$8.68, after its London-listed shares plunged 23.54 per cent on Monday.
An analyst note by investment bank Investec warned on Monday that Glencore's equity value might evaporate if commodity prices remain depressed, as the company's earnings have been hit by a slide in copper prices amid China's economic slowdown, according to a Reuters report.
As of Tuesday evening, the London-listed shares of Glencore rebounded 19.9 per cent to £82.26 in mid-afternoon trading. However, the stock is still down 71 per cent since the start of the year.
Analysts said the sell-off in Glencore, falling commodity prices and increasing worries over China's weakening economy helped fuel the overnight sell-off in European and US stocks, with most Asian markets extending the declines yesterday.
"The sentiment is very weak, as some investors are losing confidence after China's economy showed fresh signs of further weakening," said Christopher Cheung, the chairman of Christfund Securities.