Hong Kong hit eight-month low with shares down 2.2 pc
Hong Kong stocks slipped 2.19 per cent on Thursday amid concerns over the future of the US Federal Reserve’s monetary easing policy as well as the state of mainland China’s economy.
The benchmark Hang Seng Index fell 467.62 points to 20,887.04 on turnover of HK$87.74 billion (US$11.32 billion).
“Selling orders in the market are very strong,” said Castor Pang, head of research at Hong Kong brokerage Core Pacific-Yamaichi. “We don’t know where the bottom is yet.”
Concerns surrounding the mainland’s slowing economy weighed on Chinese companies listed in the city.
China Construction Bank dropped 3.20 per cent to HK$5.53, while China Mobile shed 3.25 per cent to HK$76.00 and Bank of China was down 2.15 per cent at HK$3.19.
Yifan Hu, head of research and chief economist at securities firm Haitong International, said she saw the economic situation in China as “very urgent”.
“Both the fundamentals and sentiment are very weak,” Hu said.
Chinese stocks closed down 2.83 per cent on the first day back after a three-day market holiday. The benchmark Shanghai Composite Index fell 62.54 points to 2,148.36 on turnover of 79.71 billion yuan (HK$100.28 billion).
Analysts said investors were worried by economic figures for May that pointed to a slowdown in China’s economy.
Data at the weekend showed inflation at 2.1 per cent in May, lower than 2.4 per cent in April, while exports rose just 1 per cent, a strong retreat from the 14.7 per cent in April.
And the World Bank on Wednesday slashed its growth forecast for China’s economy this year to 7.7 per cent from 8.4 per cent, warning of a potential ”sharp” slowdown triggered by a fall in investment.
“The main risk related to China remains the possibility that high investment rates prove unsustainable, provoking a disorderly unwinding and sharp economic slowdown,” the World Bank said.
Changjiang Securities analyst Zhang Yong told Dow Jones Newswires that there was little light at the end of the tunnel.
“The stock market’s sluggish performance... is likely to continue and investors shouldn’t underestimate the risks of a further correction,” Zhang said.
Property shares fell across the board. Shanghai Industrial Development lost 8.40 per cent to 6.76 yuan and Guangzhou Pearl River Industrial Development fell 7.35 per cent to 11.85 yuan.
Securities firms were hit by media reports saying the market regulator has a draft plan to reform stock offering procedures, which sparked worries about share oversupply should initial public offers, halted since last year, resume.
CITIC Securities fell 6.35 per cent to 11.35 yuan and Industrial Securities declined 6.11 per cent to 10.30 yuan.