Hong Kong Stocks slump to four-month low

Hong Kong stock market plummeted on Thursday, 13 May 2021, on tracking slump on Wall Street overnight, as hotter-than-expected U.S. inflation data rekindled concern that the Federal Reserve will be forced to bring forward monetary stimulus tapering sooner than current guidance.

At closing bell, the benchmark Hang Seng Index retreated 1.81%, or 512.37 points, to 27,718.67, a lowest level since January 7. The Hang Seng China Enterprises Index dropped 2.05%, or 216.58 points, to 10,339.99.

The sub-index of the Hang Seng tracking commerce & industry sector dropped 2.55%, the utilities sector fell 0.16%, the properties sector fell 1.58%, and the finance sector shed 1.14%.

Hong Kong market met with selling from the outset on tracking an overnight slump on Wall Street and extended its losses, dragged down by concerns that the Fed may start reducing its massive bond purchases, which have boosted stock markets so far. The U.S. consumer price index released overnight unexpectedly rose 0.8% in April after rising by 0.6% in March, and by 4.2% year-on-year, the fastest pace since 2008.

The market had expected the discussion of stimulus tapering to start around the October-December period and the actual reduction to begin next year, but it started to think of the schedule being brought forward.

The Fed has said the current pace of asset purchases will continue until it sees "substantial further progress" toward its policy goals of maximum employment and price stability. It also signaled in March that its benchmark interest rate will remain near zero through the end of 2023.

Technology stocks were the hardest hit today, on tracking a tech sell-off in U.S. peers. Computer maker Lenovo tanking 8.6%. Alibaba Group Holding slipped 3.2% to HK$213.20.

Carmaker China Evergrande New Energy Vehicle Group tumbled 7.5% to HK$47.30 after its parent sold part of its controlling stake at a 20% discount to improve its own gearing ratio. China Evergrande Group, which holds a 68% stake in the unit, slipped 1.1% to HK$12.48.

Powered by Capital Market - Live News