HONG KONG: Hong Kong stocks crumbled more than five percent on Tuesday, making it one of the worst performers on a painful day for Asian markets after a record-breaking collapse on Wall Street fuelled by concerns over rising US interest rates.
The Hang Seng Index dived 5.12 percent, or 1,649.80 points, to end 30,595.42 — its biggest close since the China-fuelled sell-off in August 2015.
The Shanghai Composite Index lost 3.35 percent, or 116.85 points, to 3,370.65 while the Shenzhen Composite Index, which tracks stocks on China’s second exchange, plunged 4.44 percent, or 80.21 points, to 1,726.09.
The HSI last month hit a series of records — hitting an all-time high of 33,484 on January 29 — as traders rode a wave of global euphoria following Donald Trump’s huge US tax cuts, strong earnings and optimism for the world economy.
The gains were also boosted by a flood of cash from mainland Chinese investors, attracted by cheaper valuations than at home, taking advantage of a cross-border stocks connect.
But the past week has seen the yield on US 10-year benchmark Treasury bills — a key guide for global rates — hit a four-year high and a strong US jobs report that also showed rising wage growth.
This sparked worries inflation would power higher, forcing the Federal Reserve to lift borrowing costs.
The losses Tuesday were the worst since August 2015, when a yuan devaluation by Beijing sparked concerns about the Chinese economy.
Still, some analysts were upbeat. “I actually think there’s buying opportunities, maybe not today, but through this week as this sell-off exacerbates,” Sean Fenton, a portfolio manager at Tribeca Investment Partners in Sydney, told Bloomberg News.
Source: Brecorder.com
