Latest News

China Stock Selloff Worsens as Hong Kong Index Nears 19-Year Low

0

S&P Futures

4,880.50

+11.00(+0.23%)

 

Dow Futures

38,077.00

+32.00(+0.08%)

 

Nasdaq Futures

17,548.25

+109.75(+0.63%)

 

Russell 2000 Futures

1,960.90

+6.10(+0.31%)

 

Crude Oil

73.13

-0.28(-0.38%)

 

Gold

2,023.60

-5.70(-0.28%)

 

Silver

22.26

-0.45(-1.96%)

 

EUR/USD

1.0909

+0.0010(+0.09%)

 

10-Yr Bond

4.1460

0.0000(0.00%)

 

Vix

13.30

-0.83(-5.87%)

 

GBP/USD

1.2715

+0.0011(+0.08%)

 

USD/JPY

147.9650

-0.1630(-0.11%)

 

Bitcoin USD

41,110.03

-487.13(-1.17%)

 

CMC Crypto 200

885.54

+0.00(+0.00%)

 

FTSE 100

7,461.93

+2.84(+0.04%)

 

Nikkei 225

36,546.95

+583.68(+1.62%)

 

China Stock Selloff Worsens as Hong Kong Index Nears 19-Year Low

(Bloomberg) — Chinese stocks in Hong Kong slumped toward their lowest level in almost two decades, as an absence of fresh economic stimulus and market support measures deepened investor pessimism.

Most Read from Bloomberg

Florida Governor DeSantis Drops Out of 2024 Race, Endorses Trump

Hedge Funds Rake in Huge Profits Betting on Catastrophe Risk

Gloom Over China Assets Is Spreading Beyond Battered Stocks

Trump Retires ‘DeSanctimonious’ Insult After DeSantis Backs Him

Sony Sends Termination Letter to Zee Over India Merger

The Hang Seng China Enterprises Index fell as much as 3.6% on Monday, edging closer to a level unseen since 2005 and making it one of Asia’s worst-performing key indexes. Chinese tech behemoths including Meituan and Tencent Holdings Ltd. were among the biggest drags.

The continued selloff in Chinese shares is in stark contrast to a more optimistic Wall Street, where the S&P 500 Index climbed to a record on Friday for the first time in two years. It also came after China’s commercial lenders kept their benchmark lending rates unchanged, a move that follows the central bank’s recent decision to maintain borrowing costs but may disappoint investors hoping for more aggressive stimulus.

The latest declines may be attributable to “a lack of catalysts in the near term and outflows to more attractive alternatives in the region,” said Marvin Chen, a Bloomberg Intelligence analyst. “Global markets have been surging on the chip sector, and this is an area where China and the rest of the world may run on separate tracks due to geopolitical tensions.”

The mood is similarly fragile in the mainland Chinese market, where the benchmark CSI 300 Index dropped as much as 2.3% Monday, the most since late 2022.

The slump once again coincided with a jump in turnover on a handful of exchange-traded funds tracking the key indexes, a sign that state-led buying may be behind the unusual spike. The onshore benchmark finished Monday 1.6% lower.

The deepening rout is adding pressure on a massive amount of so-called snowball derivatives, which are structured products that promise bond-like coupons as long as the underlying assets trade within a certain range. The CSI Smallcap 500 Index, a pricing reference for some of these products, slid as much as 3% Monday to within 1% of an earlier estimated threshold that may trigger widespread losses on the snowballs.

The gauge of Chinese stocks listed in Hong Kong has lost about 13% so far this year, while the S&P 500 has gained 1.5%. CSI 300 has shed 5.1%.

A confluence of factors have driven the swoon in Chinese stocks since 2024 began, ranging from a deepening housing slump to stubborn deflationary pressures, as well as Beijing’s reluctance to use aggressive monetary and fiscal measures to revive growth. Uncertainties about the trajectory of US interest rates, and concerns about tighter regulatory oversight have added to the pessimism.

READ MORE: China’s $6.3 Trillion Stock Rout Getting Uglier by the Day

The benefits of monetary easing by the People’s Bank of China have already been priced in and “punchier” policies are needed to revive stocks, Eva Lee, head of Greater China equities at UBS Global Wealth Management, said at a briefing Friday.

–With assistance from John Cheng.

(Updates with details on turnover on state-favored ETFs in 6th paragrapgh)

Most Read from Bloomberg Businessweek

The Downfall of Diddy Inc.

How Sweden Quit Smoking Without Quitting Nicotine

The Bitcoin Hype Is Back and About Just as Hollow as Before

Japan’s Market Roars Back to Life—With Old-Timers Leading the Way

©2024 Bloomberg L.P.

Moody’s is negative on Asia’s sovereign creditworthiness in 2024 as China growth slows

Previous article

Japan’s Sony terminates $10 billion merger with India’s Zee

Next article

You may also like

Comments

Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News