Hong Kong stocks extend losing streak as rising US Treasury yields and China property concerns rattle investors
- The Hang Seng Index fell for the third straight day, joining a regional stocks sell-off after poor demand at a US Treasury auction boosted bond yields
- Investors await China’s manufacturing PMI data which is expected to show expansion for a third straight month
The Hang Seng Index fell 1.3 per cent to 18,230.19 at the close for a third straight day of losses. The Hang Seng Tech Index dropped 0.3 per cent and the Shanghai Composite Index slipped 0.6 per cent.
Tepid investor demand at a US Treasury auction fuelled supply and deficit concerns driving up bond yields, reducing the appeal of riskier equities. Japan’s Nikkei 225 slid 1.3 per cent, while South Korea’s Kospi retreated 1.6 per cent and Australia’s S&P/ASX 200 lost 0.5 per cent.
Hong Kong stocks are seeking fresh catalysts after entering bull market territory following a 20 per cent gain from a January low. Investors are now tracking the effect of relaxation measures in China’s embattled property market after first-tier cities, including Shanghai and Guangzhou, removed some of the curbs on house purchases this week. Sentiment will also be driven by the trend in corporate earnings.
“The recent volatile swings in Hong Kong stocks are due to crowded trading and slowing capital inflows,” said Wang Yang, an analyst at Zheshang Securities. “Earnings are still the key that will sway the market. But for now, there’s no change of expectations for earnings for Hong Kong-listed companies.”