Was the Standard & Poor's downgrade of the US' credit rating an irrevocable turning point in the decline of American hegemony, or a mere technicality that - for any other country - would be of interest only to bond quants? After all, a perfect rating with two out of three credit agencies isn't bad, and S&P's downgrade to AA+ seemed more symbolic than substantive. But for traders, often the symbolic is the substance, and that view was expressed in Hong Kong on Monday and Tuesday with a 7.7 per cent drop in the HSI. The index bounced on Wednesday, up 2.3 per cent, and saw a brief rally on Friday that fizzled. A sales trader noted that volatile markets always end in tears. He observed that from September 2007 to March 2008 - when the market was grinding through the first leg of the credit crunch - the S&P 500 rallied by more than 4 per cent in a single day 14 times. Each was shown to be a false recovery - a worthy point for any investor looking to time markets amid the choppiness. Beneath the swirl of macro themes some powerful local trends were playing out in Hong Kong equities last week. Chinese airlines such as China Eastern (670), China Southern (1055) and Air China (753) got a boost on Thursday after Beijing said it would slow down the top speed of high-speed trains and suspend approval of new railway projects. Both initiatives were done to address safety concerns following the Wenzhou high-speed-train crash on July 23. Investors bought the airline stocks on the view that they would pick up traffic lost by the rail firms. China Eastern rose 6.5 per cent on Thursday, China Southern by 6.9 per cent and Air China by 2.9 per cent. However, the measures dealt another blow to the much-afflicted rail firms, such as China High Speed Transmission (658) and China Railway Construction (1186). (See Ticker Board.) After the market close on Tuesday, China Cosco (1919) warned that its interim results were likely to see losses. This followed a similar profit warning from China Shipping Container Lines (2866) on July 28. China Cosco's warning contributed to declines seen by Singamas Container (716) and affirmed general weakness in shipping and specific weakness in the container business. Li & Fung (494) finally caught a break. While the import/exporter announced a 15 per cent fall in profit, its figures were better than expectations and the stock rose 7 per cent on Friday. Meanwhile, Dah Sing Banking (2356) fell following a disappointing interim results announcement that revealed a rising ratio of non-performing loans. Elsewhere, news emerged that the Ministry of Housing and Urban-Rural Development is behind on its plan to build 10 million affordable housing units this year; also, the government had cut its target to eight million units. This hurt mainland cement stocks such as Asia Cement (China) (743), China Resources Cement (1313) and Anhui Conch Cement (914).