Investor Alert

New York Markets Close in:

Asia Markets Archives | Email alerts

April 16, 2018, 7:30 a.m. EDT

Hong Kong, China stocks slump as worries over Hong Kong dollar persist

Hong Kong Monetary Authority intervenes in FX market again

Watchlist Relevance

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    Hang Seng Index (HSI)
  • X
    Shanghai Composite Index (SHCOMP)
  • X
    China Construction Bank Corp. (601939)

or Cancel Already have a watchlist? Log In

By Joanne Chiu

AFP/Getty Images
Chinese financial stocks took a hit Monday, with China Construction Bank down about 2%.

Asian stocks’ early gains eroded Monday, led by declines in Hong Kong and mainland China over worries about the Hong Kong dollar.

The currency last week weakened to the bottom of its trading band against the U.S. dollar, leading Hong Kong’s monetary authority to try to bolster it by selling $1.23 billion in U.S. dollars to buy Hong Kong dollars.

The Hang Seng Index /zigman2/quotes/210598030/delayed HK:HSI +0.03% ended down 1.6%, while the Shanghai Composite Index /zigman2/quotes/210598127/delayed CN:SHCOMP +1.40% lost 1.5%.

“This is mainly a liquidity-driven decline” as some funds leave Hong Kong, said William Lo, chief investment officer at Infinitus Partners Asset Management. The firm has been underweighting Hong Kong stocks, expecting rising interest rates to increase local companies’ borrowing costs.

Local interest rates are rising: Hong Kong’s one-month interbank lending rate, or Hibor, jumped back to 1% on Monday from 0.85% on Friday. On a sustained basis, Lo said property developers would be hardest hit while lenders would be the major beneficiary.

Banks, though, were among the big decliners Monday, with China Construction Bank /zigman2/quotes/208058581/delayed CN:601939 -0.18%  falling 2.3% and Industrial & Commercial Bank of China /zigman2/quotes/202525815/delayed CN:601398 -0.23%  losing 2.4%.

As for mainland shares, DBS strategist Ivan Li said recent soft data from China — including Friday’s news of a surprise trade deficit for March — have cast a shadow over the outlook for the world’s second largest economy. That has some investors on the sideline ahead of Tuesday’s release of first-quarter China economic growth and March business activity, he added.

Also on tap this week are more earnings out of the U.S. and speeches by Federal Reserve officials.

Asian stocks generally started higher Monday, but by the close the only major indexes in positive territory were in Australia, South Korea and Japan. Australia’s S&P/ASX 200 /zigman2/quotes/210598100/delayed AU:XJO +0.41%  gained 0.2%, while South Korea’s Kospi index /zigman2/quotes/210598069/delayed KR:180721 +0.13%  ended up 0.1% and Japan’s Nikkei 225 index /zigman2/quotes/210597971/delayed JP:NIK +0.53%  rose 0.3%.

HK : Hong Kong Exchange
+5.17 +0.03%
Volume: 1.90M
Sept. 27, 2022 4:09p
CN : China: Shanghai
+42.64 +1.40%
Volume: 23.27B
Sept. 27, 2022 3:00p
CN : China: Shanghai
¥ 5.53
-0.01 -0.18%
Volume: 31.80M
Sept. 27, 2022 3:00p
P/E Ratio
Dividend Yield
Market Cap
¥1059.77 billion
Rev. per Employee
CN : China: Shanghai
¥ 4.34
-0.01 -0.23%
Volume: 190.04M
Sept. 27, 2022 3:00p
P/E Ratio
Dividend Yield
Market Cap
¥1470.65 billion
Rev. per Employee
+26.80 +0.41%
Volume: 1.01M
Sept. 27, 2022 5:33p
KR : Korea Exchange
+2.92 +0.13%
Volume: 487,939
Sept. 27, 2022 3:30p
JP : Nikkei
+140.32 +0.53%
Volume: 0.00
Sept. 27, 2022 3:15p

This Story has 0 Comments
Be the first to comment
More News In

Story Conversation

Commenting FAQs »

Partner Center

World News from MarketWatch

Link to MarketWatch's Slice.