Update | China and Hong Kong shares tumble again amid global market gloom, more volatility seen
The Shanghai Composite and Hang Seng indices become the worst performers globally this week
Mainland China and Hong Kong stock markets tumbled anew of Friday, becoming the worst performers among global indices in the week in the wake of sharp falls in major global markets, and analysts see further volatility with a major holiday period looming.
The Shanghai Composite Index fell 4.1 per cent, or 132.20 points, to 3,129.85 at the close, bringing losses to 9.6 per cent this week. The decline was the biggest for a five-day period in two years. In Hong Kong, the Hang Seng Index lost 3.1 per cent, or 943.85 points, to end at 29,507.42, making its losses this week 9.5 per cent.
“It is a major correction at the moment, due to a big profit in the past year, and the market sentiment is now fluctuating, since investors will take profits before the Lunar New Year holiday and there is concern over interest rates,” said Gordon Tsui, managing director at Hantec Pacific.
Hong Kong’s Hang Seng China Enterprises Index, or the H-share gauge, slid 3.9 per cent while mainland China’s CSI 300 Index of big-caps tumbled 4.3 per cent.
About 100 stocks on the Shanghai and Shenzhen exchanges fell by the 10 per cent daily limit on Friday, while all the members of the Hang Seng fell except Sunny Optical Technology Group and AAC Technologies Holdings.
“After the moves earlier this week market investor sentiment is fragile, and because of this we aren’t expecting the markets to immediately start moving higher once again,” said Kerry Craig, global strategist at JPMorgan Asset Management. “Volatility may remain for a while longer, but the strong economic backdrop and sustained earnings outlook means we continue to prefer equities.”