Hong Kong stocks slide as China industrial profit data sparks recovery worries
- Profit for Chinese industrial companies increased 0.7 per cent from a year earlier in May, decelerating from a 4 per cent gain in the previous month
The Hang Seng Index fell 2.1 per cent to 17,716.47 at the close, a level not seen since April 26, and the Hang Seng Tech Index slid 2.7 per cent. The Shanghai Composite Index retreated 0.9 per cent, as investors pruned risk from their portfolios and turned to havens, driving the 10-year Chinese government bond yields to 22-year lows.
Sentiment also took a pounding after the Japanese yen weakened to its lowest level against the US dollar since 1986, spurring concerns about competitive currency devaluation in the Asia-Pacific region, moves that could trigger more capital outflows. The dollar index approached its highest in the year.
Sell-off was broad-based, as all but five stocks in the city’s 82-member benchmark dropped. Profit for Chinese industrial companies increased 0.7 per cent from a year earlier in May, decelerating from a 4 per cent gain in the previous month, the statistics bureau said on Thursday.
“This is a setback for the economic recovery and the momentum seems to have weakened, with the property market still in a downtrend,” said Yao Liqi, an analyst at Shenwan Hongyuan Group. “Sentiment is weak and the correction may continue.”