Hong Kong stocks slide on lockdown concerns, Ukraine stand-off while Alibaba weakens on Temasek stake sale
- Stocks weakened with regional markets on city lockdown concerns, Russia-Ukraine stand-off
- China injected US$15.7 billion of liquidity to support businesses and counter a slowdown in economy
The Hang Seng Index slipped 0.8 per cent to 24,355.71 at the close after a measure of volatility reached the highest level in four months. The three-day decline for the benchmark was the longest in a month. The Tech Index dropped 0.2 per cent, erasing an earlier gain.
Oil producers and insurers were the worst performers. PetroChina and Sinopec dropped more than 3 per cent, surrendering some of their rallies on Monday on the back of crude oil rally. China Life Insurance and Ping An Insurance each sank 3.5 per cent.
“Hong Kong’s economy now faces more pressure from the plummeting consumption related sectors,” Natixis analysts wrote in a February 14 note to clients. The government should consider expanding its fiscal stimulus to compensate residents and the affected industries, they added.
The Shanghai Composite Index gained 0.5 per cent, as China’s central bank injected 100 billion yuan (US$15.7 billion) of liquidity into the system through the medium-term lending facility to support businesses to arrest an economic slowdown.
Alibaba Group Holding, the owner of this newspaper, lost 0.3 per cent. Singapore’s state investment firm Temasek Holdings pared its ownership in the Chinese e-commerce group last quarter. It bought rivals JD.com and Pinduoduo, according to its 13F filing late Monday.
Markets in Asia-Pacific sold off in tandem with global peers, after traders ramped up bets the Federal Reserve will raise its key interest rate for six or seven times this year, against the previous projection for three times. US inflation quickened last month at the fastest in four decades. Ten-year US Treasury yield rose above 2 per cent last week, the highest since July 2019.
02:38
‘We’re scared’: fear and uncertainty on Ukraine’s front lines
“Most geopolitical issues have little impact on markets beyond creating very short-term volatility,’” Kristina Hooper, a strategist at Invesco, wrote in a note. “But this could be different simply because of the potential impact on the price of commodities at a time when inflation is driving central bank actions.”
Gold futures climbed to an eight-month high and oil futures topped US$95 a barrel after the US warned that Russia could invade Ukraine at any day, stoking a flight to safety. Oil surged on fears of supply disruption.
Chengdu KSW Technologies, a maker of telecommunications equipment, jumped 11 per cent from the initial public offering price to 37.53 yuan on the Star Market in Shanghai.
