Hong Kong stocks suffer biggest loss since Brexit, while China A shares climb to two and half month high

The Hang Seng Index on Tuesday saw its biggest fall since plunging 2.9 per cent after Britain’s Brexit vote on June 24, while mainland China A shares inched up above 3,000 for the first time in two and a half months.

The blue-chip index in Hong Kong closed at 20,750.72, down 1.46 per cent or 308.48 points, ending the upward trend seen over the past three trading days. The Hang Seng China Enterprises Index shed 1.81 per cent or 159.04 points to 8,643.31.

Utilities, banking and insurance sectors led the drop, while property developers and Macau casino operators pulled back from their strong gains seen in previous sessions. Galaxy Entertainment lost 3.63 per cent to HK$22.55 while Hang Lung Properties fell 3.45 per cent to HK$15.66.

The Hang Seng Index will continue to swing between 18,000 to 22,000 in the second half of the year, said Will Leung Chun-fai, executive director at Standard Chartered Bank (Hong Kong).

“The impact of Brexit is unlikely to trigger another sharp sell off in Hong Kong…although the negative impact has not been fully reflected on the British pound,” Leung said, adding that companies with high dividend yieldsremain the most sought-after stocks.

In the past five trading days, the blue-chip index has fully recovered from losses suffered in the wake of the stunning Brexit result, and even approached its the highest level in four weeks.