Hong Kong stocks close at lowest level since 2012 even as China makes modest recovery

Hong Kong’s markets closed at the lowest level in more than three years on Tuesday after ceding morning gains even as major indexes in mainland China steadied somewhat amid continuing uncertainties over the economy and currency volatility.

The Hang Seng Index closed down 0.89 per cent at 19,711.76, its lowest since September 6, 2012.

The Hang Seng China Enterprises Index, which tracks mainland-based companies, finished at 8,439.31, down 0.77 per cent.

Market analysts said the decline reflects investors’ lack of confidence in China’s economy, with many remaining worried about further shocks in the market and fluctuations in the currency.

“The surprising thing is that the Asia market actually stabilised. In the afternoon, there was selling pressure. Many investors just want out, so cash is king right now,” said Francis Lun, chief executive of GEO Securities. “Everybody fears this may be the lowest level. It could go even lower – the short-term target is 19,000. Maybe at 19,000, the market will stabilise.”

Although sectors like jewellery and watches, hotels and banking made slight gains, many sectors continued to bleed, with agricultural products, mining, and health and personal care losing about 2 per cent on average.