Hong Kong stocks dropped for a second consecutive trading session on Thursday, with market sentiment weighed down by fears that tension between protesters and police is still high after Wednesday’s traffic-paralyzing demonstrations.
The city’s equity benchmark Hang Seng Index tumbled nearly 500 points in Thursday’s morning session before recovering in the afternoon, closing down 0.05 percent, or 13.7 points, at 27294.
The equity gauge’s dip followed its drop of 1.73 percent on Wednesday, when protesters took to the streets in opposition against the government’s proposed extradition-law amendments, blocking thoroughfares in the city’s Central and Admiralty districts.
The intensifying Sino-US trade dispute, Goldin’s drop of its Kai Tak land parcel deal, and Wednesday’s protest are the three key reasons for the unfavorable market sentiment, according to Kwok Sze-chi, executive director of Bright Smart Securities
The intensifying Sino-US trade dispute, Goldin’s drop of its Kai Tak land parcel deal, and Wednesday’s protest are the three key reasons for the unfavorable market sentiment, according to Kwok Sze-chi, executive director of Bright Smart Securities.
Although the Hang Seng Index fell below its 10-day moving average in the middle of Thursday’s trading hours, it clawed back above the technical level before the market closed, suggesting that investors had a more-sanguine outlook than they did on Wednesday, when the gauge didn’t hold above either its 20-day or 250-day moving averages, Kwok said.
The market seems to have a consensus that the US Federal Reserve’s highly-anticipated rate cut — perhaps as early as July — would fuel bullish momentum for Hong Kong’s equities, but Dickie Wong Tak-kai, executive director of research at Kingston Securities, disagrees.
Wong believes that a rate cut would be a sign of a downward trend in the US economy, which, along with an “inverted yield curve” of US Treasury bonds — which has preceded every US recession since 1945 — suggested the picture may not be as rosy as it many think it is.
Meanwhile, any de-rating toward Hong Kong’s investment outlook from major credit rating agencies, such as Standard & Poor’s, could further dampen the city’s appetite and may trigger some capital retreat from the Asian financial hub, Wong said.
But Kwok said the protest might just put some short-term pressure on sectors like retail consumption, dining and tourism, and will not evolve into anything more serious.
A number of businesses were shut and events were canceled on Wednesday because of the demonstrations.
Hong Kong Stock Exchanges and Clearing rescheduled its 19th-anniversary cocktail reception on Wednesday, while the Securities and Futures Commission allowed its personnel to leave its Cheung Kong Centre office early.
Banks, including HSBC, Standard Chartered and CITIC Bank International, suspended their branch services in Admiralty, where the protest took place.
Copyright 1995 - 2019. All rights reserved. The content (including but not limited to text, photo, multimedia information, etc) published in this site belongs to China Daily. Without written authorization from China Daily, such content shall not be republished or used in any form.
HONG KONG NEWS