Hong Kong stocks end month in red amid US-China tensions despite signs of China economic recovery
- Hang Seng Index gained 0.8 per cent on Wednesday after rising as much as 2.2 per cent; index dropped for first monthly loss since May
- China Evergrande soared 19.4 per cent after unveiling steps to pre-empt a 130 billion yuan cash crunch in the first quarter next year
Hong Kong markets gained on Wednesday but reported its first monthly decline since May, as deteriorating US-China relations ahead of the US presidential elections roiled the markets despite signs of economy recovery from China.
The Hang Seng Index ended trading on Wednesday with a 0.8 per cent gain to 23,459.05, paring an earlier 2.2 per cent rally in early trading. The benchmark completed the month with a 6.8 per cent drop, bringing the loss this year to 17.2 per cent.
Heightened US-China tensions have roiled the markets over the past month, as the Trump administration moved to impose restrictions on Chinese semiconductor producer SMIC and threatened bans on popular Chinese apps TikTok and WeChat.
SMIC gained 2.4 per cent on Wednesday, trimming the decline this month to 27.2 per cent. Benchmark heavyweight Tencent, the owner of WeChat, gained 1.2 per cent to HK$511.50, unable to reverse a 3.6 per cent loss in September.
“US-China relations still remain under very intense conditions,” said Louis Tse Ming-kwong, managing director of VC Asset Management. He advised extra caution going forward as the US presidential elections neared, and that investors should expect volatility in the markets, particularly in tech stocks priced at high levels.
Markets in Hong Kong will be closed for the rest of the week for the National Day and Mid-Autumn Festival holidays. While Hong Kong will resume trading on Monday, markets in China will reopen on October 9.