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Wednesday, June 03, 2020, 16:57
Hong Kong stocks recover from US$210 billion selloff
By Bloomberg
Wednesday, June 03, 2020, 16:57 By Bloomberg

Hong Kong’s stock benchmark is poised to recoup all its losses from a US$210 billion rout last month, a sign that investor confidence is improving.

The Hang Seng Index closed up 1.4 percent on Wednesday, surpassing its 24,280.03-point close from May 21. The index plunged 5.6 percent the following day, the worst slide since 2015.

The Hang Seng Index closed up 1.4 percent on Wednesday, surpassing its 24,280.03-point close from May 21

Investors seem to be starting to look past a worst-case scenario where a loss of confidence would lead to capital flight. Hong Kong stocks rallied Monday on speculation that US won’t take extreme steps toward the city in the near future, even as it begins the process of stripping Hong Kong’s privileged trade status. US officials previously said they could no longer certify Hong Kong’s political autonomy.

ALSO READ: Hong Kong stocks close 3.36% higher

“Global investors are putting more funds into the equity market - the US, Europe as well as Hong Kong - driven by optimism over economic reopenings as the pandemic eases,” said Steven Leung, executive director with UOB Kay Hian (Hong Kong) Ltd. “But I’d say stocks in Hong Kong may be a bit overbought. The virus is not completely controlled and protests are fueling concerns in the US. I think investors should be very cautious.”

The Hang Seng has climbed 5.9 percent this week, putting it on pace for its biggest such gain since November 2018.

The Hong Kong dollar on Wednesday traded very close to the strong end of its trading band.

READ MORE: HK finance secretary says no plans to change US dollar peg


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