Hang Seng Index falls most in two weeks on scepticism over magnitude of new relief package
- The city’s benchmark drops even after the government rolled out HK$2 billion package to revive tourism and logistic sectors
- New listing Snack Empire takes a wild trip in debut, finishing lower at the close after the stock had almost tripled in intraday trading
Hong Kong’s stocks dropped by the most in two weeks on angst that a HK$2 billion (US$254 million) relief package would do little to revive growth at the former British colony that has been roiled by anti-government protests.
The Hang Seng sank 0.8 per cent, or 219.47 points, to 26,566.73 at the close on Wednesday, its worst performance since October 4. The mainland’s Shanghai Composite Index also fell, retreating 0.4 per cent to 2,941.62.
While the Hong Kong government on Tuesday night unveiled the relief measures aimed to resurrect the tourism and logistic industries that have borne the brunt of the political unrest, investors including Alan Li at Atta Capital were not pleased, saying other factors like the China-US trade conflict would continue to weigh on the economy. The latest economic aid followed a package of HK$1.4 billion in October and one worth HK$19.1 billion in August.
“The trade war and (expected US) rate cut are still the main concerns of the market,” said Li, a portfolio manager at Atta Capital. “Both have no significant updates until the end of November. The market has no clear direction.” But sentiment is “slightly positive,” enough so that people are still looking for single stock opportunities rather than sitting out entirely, he added.
A report from the Financial Times that Beijing was planning to replace Chief Executive Carrie Lam Cheng Yuet-ngor also failed to boost sentiment.
The decline on Hong Kong’s market was broad-based, with all but five companies in the 50-constituent Hang Seng Index finishing the day lower.