Monday, 06 July 2015 14:21
HONG KONG: Hong Kong stocks plunged 3.18 percent by lunch Monday, with big-name firms taking a heavy hit, as Greece’s “No” vote to further austerity overshadowed news China had unveiled fresh measures to support slumping mainland markets.
The benchmark Hang Seng Index fell 827.83 points to 25,236.28 on turnover of HK$ 212.71 billion (US$ 27.45 billion).
Traders in Shanghai sent the market surging almost eight percent in the first few minutes after Chinese leaders at the weekend unveiled their biggest package of measures so far to shore up slumping mainland markets.
On Sunday, the government said the central bank would provide liquidity through the state-backed China Securities Finance Co., which manages margin trading.
And market watchdog the China Securities Regulatory Commission said there would be no initial public offerings (IPOs) “in the near future”.
On Saturday China’s 21 largest brokerage firms said they would invest at least 120 billion yuan ($ 19.3 billion) in so-called “blue chip” exchange traded funds (ETFs).
However, the initial gains were quickly pared and Shanghai fell into negative territory — down almost one percent — before closing 2.41 percent higher as analysts questioned the likely effectiveness of the measures.
And the gains in Hong Kong soon turned to losses as the morning progressed with the focus moving to Europe, where Greece overwhelmingly voted “No” to a creditors’ bailout package, which analysts say has made its eurozone exit more likely.
The Greek people shunned the prospect of more painful austerity, despite warnings from European leaders that Sunday’s referendum was effectively an in-out vote on the country’s eurozone future.
Shinya Harui, currency analyst at Nomura Securities in Tokyo, said: “I personally think the chance (of the Greek exit) is very high, at around 70-80 percent.”
Among the biggest losers, Hong Kong Exchanges and Clearing tumbled 9.55 percent to HK$ 235.00 — its worst performance since October 2008 — after Goldman Sachs cut it to “sell” owing to concerns about volumes as mainland investors wind down their buying.
The operator of the city’s bourse has tumbled about 20 percent since hitting a record high in May. Until then it had soared more than 50 percent since April thanks to a huge inflow of cash from mainlanders using a link-up between the Hong Kong and Shanghai exchanges.
There were also big losses for Lenovo, which shed 8.09 percent to HK$ 9.43, while China Resources Land sank 6.71 percent to HK$ 22.25, and Tencent dropped 5.54 percent to 146.50.
China Unicom was 5.52 percent off at HK$ 11.30, while HSBC lost 2.37 percent to HK$ 67.90.
Chinese brokerage Guolian Securities crashed 31.1 percent to HK$ 5.51 in the worst trading debut on the index this year.
