Stocks retreat in Hong Kong, China for weekly loss, as rout of ‘overvalued’ tech stocks on Wall Street spills over to Asian markets

Hong Kong’s benchmark Hang Seng Index fell 1.3 per cent to 24,695.45 for a weekly loss of 2.9 per cent

The CSI300 that tracks performances on both the Shanghai and Shenzhen markets dropped 1 per cent to 4,770.22 for a weekly loss of 1.5 per cent

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An electronic signboard in the dealing room of Hana Bank shows the benchmark Korea Composite Stock Price Index (KOSPI) having plunged 2.1 per cent in Seoul on 4 September 2020. Photo: EPA-EFE

Published: 10:21am, 4 Sep 2020Updated: 7:02pm, 4 Sep 2020

Stock indices in Hong Kong and China dropped on Friday to end with weekly losses, as the overnight tumble among technology stocks on Wall Street spilled over to Asian trading, raising concern that the recent run-up in the global equity markets may have been overdone.

Hong Kong’s benchmark Hang Seng Index dropped 1.3 per cent to 24,695.45 for a weekly loss of 2.9 per cent after three straight months of gains through August. The CSI300 index that tracks performances on both the Shanghai and Shenzhen markets dropped 1 per cent to 4,770.22, ending the week with a 1.5 per cent decline.

Rising geopolitical tensions had weighed on market sentiment throughout the week, as the US posed new restrictions on Chinese officials and mulled cracking down on other Chinese-made apps besides TikTok. India had also moved to ban over a hundred Chinese mobile apps on Wednesday, adding pressure to technology companies in China.

Upbeat economic data from China released throughout the week and a rebound in the mainland’s demand for domestic travel helped cushion the falling indices, before the US tech sell-off overnight rippled over to Asian markets.

The benchmarks in Hong Kong and China took their cues from declines across most other Asian markets on Friday, with losses being recorded on every major index from Seoul to Sydney. Investors sought refuge after the New York stock market posted its biggest one-day pullback in nearly three months, with the S&P 500 falling 3.5 per cent while the technology-heavy Nasdaq Composite plunged 5 per cent, led by an 8 per cent plunge in Apple’s shares.

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