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Hong Kong’s Hang Seng hit a five-year low

Hong Kong’s Hang Seng index fell 3.9% on Monday to a July-2016 low as international sales boosted by the war in Ukraine put new pressure on the market, which is facing repression from Beijing companies and harsh local pandemic policies.

Some of China’s key stock indices also fell to their lowest level in more than a year after a weekend in the Chinese parliament failed to allay investor concerns about the country’s technology and property regulatory forecasts.

Hang Seng is a key measure of Hong Kong’s broader market, one of the largest in the world outside the U.S., with shares listed at around $ 5.2 trillion since February.

The compilers have upgraded Hang Seng to a broader and more dependent financial position, but that did not save the index from a bad performance last year, given China’s limitations in technology, gaming, ownership and the extracurricular sectors. education.

After recovering some losses earlier this year, Hang Seng fell into negative territory in late February when Russia’s invasion of Ukraine shook investors and the city struggled to cope with the biggest wave of Covid-19. Monday Fall, At 21057.63, the year-on-year loss of the index was 10%, which is about 2% lower than a decade ago, according to FactSet data.

According to index points, the biggest contributor to Monday’s decline was the huge distribution of food in Meituan.,

It fell 11% to its lowest level since May 2020 and HSBC Holdings PLC,

It fell by 7.1%. Banks like HSBC can typically get higher margins when reference borrowing costs are higher, and global bond yields have recently declined.

Chinese leaders set a higher-than-expected GDP growth target of 5.5% this year at weekend meetings, indicating a more aggressive stimulus in the coming months as the meeting shed little light on when regulatory pressure would be lowered for Internet companies and others.

“We haven’t heard from the authorities yet to pause with the reforms, but we are actively looking for signs,” said Jack Siuk, Credit Suisse.‘s

Chief Investment Officer of Greater China.

Similarly, there was little sign of a break in China’s economically important real estate sector, where many non-state-sponsored developers are struggling with slowing sales and a drying up of financial markets.

“Most people in the market were looking for a relaxation on the property’s edge, and we didn’t get it,” said Hao Hong, head of research and chief strategist at Bocom International.,

he added that this has weighed heavily on onshore stocks.

Hong Kong’s strict Covid-19 policies have sidelined some residents and put pressure on the economy.


Photo:

TYRONE SIU / REUTERS

In mainland China, the benchmark CSI 300 index of blue-chip stocks fell 3.2% on Monday from July 2020 to its lowest close, and the ChiNext price index, which tracks a high-tech chart in Shenzhen, fell from November 2020 onwards. The Shanghai composite fell 2.2%.

The war between Russia and Ukraine could affect China more than any other emerging market, as China is Europe’s main trading partner and has also developed closer ties with Russia, according to a report by Morgan Stanley strategists led by Laura Wang last week.

In Hong Kong, the city’s strict policy of maintaining Covid-19 has also pushed some residents away and put downward pressure on the economy.

The city’s policies are not clear enough for investors to accurately predict Hong Kong’s short-term economic growth forecast, said David Chao, a strategist for Japan’s global Asia Pacific market in Invesco. He said the Hong Kong market would only start to recover when the pandemic strategy became clearer, probably in the second half of the year.

Write to Rebecca Feng at rebecca.feng@wsj.com and to Clarence Leong at clarence.leong@wsj.com

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Hong Kong’s Hang Seng hit a five-year low

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