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Hong Kong Market tumbles on unrest, fears US-China trade stalling

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Capital Market
Last Updated : Nov 13 2019 | 4:04 PM IST
The Hong Kong stock market closed lower on Wednesday, 13 November 2019, as risk off selloff triggered amid concern about intensifying unrest on the island city and confusing signals over the extent of progress made in U.S.-China trade talk after U.S. President Donald Trump said he would raise tariffs on Chinese goods if the two countries fail to reach a trade deal. At closing bell, the benchmark Hang Seng Index tanked 1.82%, or 493.82 points, to 26,571.46. The Hang Seng China Enterprises Index sank 1.61%, or 171.97 points, to 10,519.12.

Investors were in confusion over the extent of progress made in U.S.-China trade, President Donald Trump gave an update Tuesday on trade negotiations with China, saying both sides are close to a "phase-one" deal, but that he would only accept it if the agreement worked to the advantage of U.S. workers and businesses. U.S. President Donald Trump also threatened more tariff hikes on Chinese imports if talks aimed at ending a trade war fail to produce an interim agreement.

US-China is looking to hammer out the first phase of an agreement that would ease some tariffs but details of a potential deal remain in flux. The U.S. is pushing for more open markets and the elimination of intellectual property theft. China, for its part, wants Washington to drop some $250 billion in tariffs imposed since the trade war began.

Meanwhile, market movements in Hong Kong continue to be monitored, following an escalation in violence amid unrest in the embattled city. As anti-government protests rattled the city for a third straight day, transport, schools and many businesses closed for safety concerns. The protests began in June over a proposed extradition law and have grown to include demands for greater democracy and other grievances.

All the 50 members but one on the Hang Seng Index dropped on Thursday, with property developers and banks being among the biggest decliners. New World Development slid 4.9% to HK$10.46. Wharf Real Estate Investment dropped 3.7% to HK$42.25. HSBC retreated 1.4% to HK$58.25 after S&P's downgrade. Bank of Communications lost 1.7% to HK$5.27. HKEX (00388) dipped 2.1% to HK$242.2. China Mobile (00941) shed 1.8% to HK$61.65. AIA (01299) plunged 3.2% to HK$77.75. Tencent Holdings slipped 0.9% to HK$327.40 before the release of its third-quarter earnings. Sino Biopharmaceutical (01177) was the only rising blue chip. It rose 0.9% to HK$11.38.

Property counters bore the brunt of the selling pressure on rising social unrests. New World Development (00017) slumped 4.9% to HK$10.46. Sun Hung Kai Properties (00016) shed 2.4% to HK$109.4. Hang Lung Properties (00101) sank 1.7% to HK$16.3. Wharf REIC (01997) fell 3.6% to HK$42.25. Henderson Land Development (00012) moved down 2.9% to HK$37.25. Sino Land (00083) was down 3.2% to HK$11.44. CK Asset (01113) weakened by 2.4% to HK$52.4.

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First Published: Nov 13 2019 | 3:54 PM IST

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