Hang Seng Bank sees biggest fall in 2 months as economic weakness, virtual banks weigh on banking outlook
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Banking stocks helped drag down Hong Kong’s Hang Seng Index Wednesday after Morgan Stanley warned they are vulnerable to the city’s economic slowdown and the rise of virtual banks.
Hang Seng Bank – the second worst performer on the Hang Seng – closed down 3.3 per cent to HK$159.80. That was its biggest percentage fall in more than two months, following its 3.6 per cent decline on August 5.
HSBC slid 0.56 per cent to HK$58.10 and Standard Chartered fell 0.9 per cent to HK$61.05. The three banks were dropped to underweight/cautious.
“In the past, the tourism and retail sectors as well as shopping malls took the brunt of the protests. Now investors seem to be worried about the state of the Hong Kong economy, and may be cautious towards the performance of the banking sector,” said Stanley Chan, director of research at Emperor Securities. “The weakening interest rate environment also does not bode well for bank stocks.”
The Hang Seng finished the day down 0.8 per cent at 25,682.81.