China, HK stocks slide with eyes on rising volatility and political tension, US stimulus impasse

23-Oct-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

China’s stocks slumped by the most in four weeks while Hong Kong’s benchmark index halted a four-day rally on concerns about rising volatility and political tension before the US presidential election on November 3.

The CSI300, which tracks the biggest companies in Shanghai and Shenzhen, fell 0.8 per cent to 4,753.74 at the midday break, set for the biggest pullback since September 24. The Hang Seng Index slipped 0.2 per cent to 24,699.11, retreating from a six-week high.

Telecommunications companies led losses, giving up most of their gains from Wednesday. China Unicom lost 9.5 per cent and China Mobile shed 2.9 per cent. The Hang Seng Tech Index of 30 members fell 0.9 per cent as Tencent Holdings slumped 1.2 per cent.

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The US designated another six lesser known Chinese media as “foreign missions” in another sign of escalation in political tension.

Asian stocks followed US markets lower with steep losses in Japan, South Korea and Australia on speculation talks for a trillion-dollar virus-relief package will not be ready before the poll. At the same time, the US also accused Iran and Russia of trying to interfere with its presidential election.

“With investors suffering a severe case stimulus talk exhaustion, more and more market participants opt for the sidelines to avoid the steam rollers known to the pancake markets in low volume conditions,” said Stephen Innes, a strategist at Axi. “The pre-election fiscal stimulus’s odds continue to look very low.”

Alibaba Group, the owner of this newspaper, dropped 0.3 per cent to HK$299.40, failing to sustain a rally above HK$300.

China’s top security regulator approved the Shanghai leg of fintech unicorn Ant Group’s initial public offering on Wednesday, the final hurdle for what is likely to be the world’s biggest IPO ever. The timetable however suggests the stock will not trade before Americans elected their new president for the next four years.

“The Hong Kong market is tracking declines in the US as the stimulus package lacks progress, while some investors may take profit and turn cautious before the US election,” said Carl Cai, analyst at SPDB International. The Hang Seng Index will see more fluctuations in the next two weeks, he added.

On the mainland, vaccine producers were the biggest losers. Shanghai Fosun Pharmaceutical Group shed 4.6 per cent per cent. Shenzhen Kangtai Biological Products dropped 5.7 per cent.

In new listings, Guangzhou Metro Design & Research Institute jumped by the maximum limit to 19.34 yuan. Shenzhen Consys Science & Technology more than doubled to 234 yuan.

The Fifth Plenum of the 19th Communist Party Congress will start from next week, which will chart China’s economic development for the next five years.

https://sg.news.yahoo.com/china-hong-kong-stocks-slide-032522024.html

 

Category: Hong Kong

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