Hong Kong market slips in late trading after clutch of stocks plunges, denting trader optimism
- China property developer Jiayuan collapses by 81 per cent in Hong Kong
- Hong Kong, mainland markets helped earlier in day by China’s central bank step to inject more cash into financial system
The Hang Seng Index ended down slightly Thursday, after a hair-raising afternoon trading session that saw a clutch of stocks plunge by as much as 81 per cent.
The Hang Seng closed down 0.5 per cent, or 146.47 points, to 26,755.63. It got an early boost from the latest announcement by China’s central bank that it was shovelling more cash into the financial system.
But the bounce on the Hang Seng turned into a slide in late trading when the clutch of companies – led by China property developer Jiayuan International Group – began collapsing. They were too small even before the plunge to be part of the Hang Seng, but weighed on larger property shares and the overall index.
Jiayuan plummeted by 81 per cent to HK$2.52. Sinking along with Jiayuan were developer Sunshine 100 China Holdings, internet of things solution provider Rentian Tech and Hongda Financial Holding, whose shares all collapsed by around 70 per cent.
Meanwhile, the Shanghai Composite Index retreated 0.4 per cent, or 10.79 points, to 2,559.64.
The property subindex of the Hang Seng sunk by 2.2 per cent, the most among all sectors, as worries over liquidity situation spread from Jiayuan to the whole sector.
Jiayuan, valued around the 32nd among all Hong Kong-listed developers before the crash, had over HK$26 billion of market capitalisation wiped out over the course of two hours. It was the eighth-most traded stock of the day. It was part of the property subindex.