Hong Kong Stocks tumble on the first trading day of 2019

Headline shares of the Hong Kong financial market were down on the first trading day of the new year, Wednesday, 2 January 2019, as two China's gauges showing manufacturing slipped into contraction in the world's second-largest economy added to slowdown concerns. In afternoon trades, the Hang Seng Index stumbled 615.82 points or 2.4% to 25,229.88. The Hang Seng China Enterprises Index surrendered 275.41 points or 2.7% to 9,849.34. The Hang Seng Index ended 2018 with an overall 14 per cent decline, making its worst performance in seven years.

Figures on Wednesday showed China's manufacturing sector contracted for the first time in 19 months in December, with the Caixin-Markit manufacturing purchasing managers' index dropping from 50.2 in November to 49.7, below the 50-point level separating expansion from contraction. It also mirrored the official reading from the National Bureau of Statistics released on Monday, which fell from 50 in November to 49.4 in December, its lowest level since January 2016. The private survey focuses on small and medium-sized enterprises while the official PMI gauge focuses on large companies and state-owned enterprises.

The US-China trade war continues to be a wild card for equities. A US delegation will hold trade talks with Chinese officials in Beijing next week to try to iron out differences over such things as market access and intellectual property protection.

Health care stocks suffered heavy losses on concern a pilot programme of centralised procurement of generic drugs that has cut prices by half will erode profits. CSPC Pharmaceutical Group shed 5.7% and Country Garden Holdings slumped 5%.

Powered by Capital Market - Live News