New | Hong Kong and Chinese markets reel by midday in sell-off

Negative sentiment prevailed in Hong Kong and China equity markets on Friday morning, following on from overnight declines in overseas markets and below-forecast China PMI figures.

The Hang Seng Index closed the morning on 22,230.06 points, its lowest intraday level since May 12, 2014, down 2.32 per cent on Thursday’s close and 7.34 per cent for the week.

Shanghai’s index slid to 3,552.82 points, down 3.04 per cent on the previous close and 10.40 per cent for the week, losses that were mirrored in Shenzhen.

“Short sellers are riding high on the negative sentiment. They’ll do everything they can to pull the market down to make huge profits,” said Louis Tse, a director of VC Brokerage.

“I think we’re looking at [the Hang Seng Index reaching] 22,000 points, but I think there will be very strong support at 21,800,” Tse said.

At least 18 of the 50 Hang Seng Index stocks hit their 52 week lows, with property and energy firms leading the retreat. Supply chain and sourcing group Li & Fung stood out by gaining over 4 per cent despite reporting a decline in first half profits.

Among Hong Kong’s most heavily traded stocks, only mainland telecoms provided a glimmer of light. China Mobile and China Unicom gained less than one percentage point, while China Telecom lifting 3.68 per cent to HK$4.51.