Hong Kong Market falls to near two-month low

Hong Kong share market finished session near two-month low on Tuesday, 10 May 2022, after returning from a long holiday weekend, mirroring a wider fallout on Wall Street overnight, amid concerns about the outlook for the global economy. That adds to pressure from concern over the adverse impact of China's "zero-COVID" policy, including disruptions on the global supply chain, following reports that restrictions have been tightened in some parts of the country.

At closing bell, the benchmark Hang Seng Index fell 1.84%, or 368.69 points, to 19,633.69. The Hang Seng China Enterprises Index shed 2.22%, or 151.27 points, to 6,658.25.

 

Market participants concerned that an aggressive moves by global central banks to contain inflation could lead to a period of stagflation or an outright recession. Central banks in the United States, Britain and Australia raised interest rates last week, and investors girded for more tightening as policymakers fight soaring inflation.

The Federal Reserve warned on Monday of declining liquidity conditions across key financial markets, amid sharp monetary policy tightening by major central banks to fight rising inflation.

China recorded its lowest export growth rate in two years in April, according to data released on Monday, cementing fears of the nation's rapidly deteriorating growth outlook as strict zero-Covid controls disrupted supply chains. Overall exports grew by 3.9% last month, the lowest since June 2020.

Among blue chips, JD.com led the losses, sinking 8.2% to HK$208, while Meituan fell 3.3% to HK$151.80. Alibaba Group Holding lost 4.8% to HK$86. BYD tumbled 6% to HK$215, while Sands China declined 6.9% to HK$15.36.

Shares of property developers closed lower after reports that new home sales in 23 major Chinese cities fell 33% year on year during the five-day May Day holiday. Country Garden dropped 8.4% to HK$4.45, while Country Garden Services retreated 10.5% to HK$25.55.

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