NewHong Kong stocks extend downward slide
Hang Seng benchmark on track for its worst annual performance in four years
Hong Kong shares traded lower on Wednesday, extending a slide that has the benchmark index set for its worst annual performance in four years, while mainland Chinese stocks in Shanghai were little changed, as the yuan traded at a five-year low.
At midday on the last full trading session of the year, the Hang Seng index fell 0.46 per cent to 21899.42, while the China Enterprises Index for mainland companies plunged 1.84 per cent to 9608.57. As of Tuesday’s close, the Hang Seng was down 6.8 per cent for the year, reflecting its worst four years since a 20 per cent drop in 2011, when concerns over the break up of the European single currency sent global markets into free fall.
On the mainland, the Shanghai Composite ended flat after mild gains and losses over the course of the morning session, finishing down just 0.07 per cent to 3561.13, The China Securities Index dipped 0.27 per cent to 3751.59.
VC Brokerage director Louis Tse Ming-kwong said Chinese markets were down as a result of the falling yuan exchange rates, as well as low turnover ahead of Friday’s New Year break. Hong Kong’s market will close for the week at midday Thursday, while China markets will close Friday.
“Some people may be hoping it’s going to rebound at the beginning of the new year,” he said. “If you buy today the settlement day will be next Tuesday so there might be some bottom fishing before the end of the day. But they may do it tomorrow during the half session - by the look of it, the market still has room to go down.”
Meanwhile the People’s Bank of China set the US dollar reference rate at 6.4895 prior to the open of trade, down 0.05 per cent, and its lowest level since May 2011.