Investors dump stocks on poor China economic data
Hang Seng Index falls 1.4 per cent after Beijing says growth and industrial output slowed
The Hang Seng Index yesterday fell the most in more than a week after the mainland's poor economic data for last month took investors by surprise and triggered a sell-off across the board.
A drop in gold prices also weighed on the market, dragging down mining shares. Zijin Mining, the country's biggest gold miner, fell 7.2 per cent to HK$2.33. Spot gold prices fell up to 5 per cent to US$1,384.69 an ounce, the lowest in two years.
The spokespersons for gold dealers Chow Tai Fook and Luk Fook said retail sales of gold products had been rising with consumers rushing to buy as prices dropped. But their companies' shares fell sharply.
"It's hard to say how much the additional sales will help. If the dealers have a low hedge ratio and thus a high net position of gold holding, falling prices may not be fully compensated by sales improvement," said Will Leung, the head of investment strategy at Standard Chartered's wealth management unit.
The Hang Seng Index slid 1.43 per cent to 21,772.67 points, while the H-share index fell 2.02 per cent to 10,440.76 points. The Shanghai Composite Index fell 1.12 per cent to 2,181.94 points. In the US, the Dow fell 0.58 per cent while S&P 500 was 0.77 per cent down on China data.
"This is a big setback on the recovery path. Many investors are trading a scenario that China's economic recovery has stopped temporarily," said Agnes Deng, the head of Hong Kong China equities at Barings.