Hong Kong stocks slump to a 2-month low as US debt impasse casts shadow on sentiment
- Hong Kong stocks fell for a second day as the lack of progress on the US debt ceiling talks continued to weigh on sentiment
- Alibaba fell 2.3 per cent amid rumours of impending lay-offs at its cloud division
The Hang Seng Index declined 1.6 per cent to 19,115.93 at the close of trading on Wednesday, the biggest drop in a week, which took the benchmark to the lowest level since March 20. The Tech Index dropped 2 per cent, while the Shanghai Composite Index lost 1.3 per cent.
The White House and the Republicans ended another round of debt ceiling talks on Tuesday without signs of meaningful progress, leaving traders on edge as a deadline for potential default approaches. Treasury Secretary Janet Yellen said the US could find itself unable to pay its bills as soon as June 1.
“The market might have yet bottomed out” amid rising uncertainties in the US and China’s recent weak economic data, Zhou Ying, an analyst at China Galaxy Securities, said in a note on Wednesday. “Looking ahead, the market will need to wait until at least July to further confirm whether the economy will experience a better recovery, or if policies will become even more accommodative.”