ALERT: Hang Seng slides 3.56%

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Hong Kong’s Hang Seng slides 3.56 %, below 19,000 as HK$ hits eight-year low

Hong Kong dollar falls for a fifth straight day amid continued capital outflows; property stocks plunge on expectations of interest-rate increases

SCMP,

20 January, 2016

Welcome to the SCMP’s live China markets. The intense volatility in Chinese markets into 2016 due to the implementation of the circuit breaker has roiled world financial markets. Investors are increasingly focused on the broader question of how this episode might affect the wider economy of the country. We’ll bring you the key levels, trading statements, price action and other developments as they happen.

11:22 am By Jessie Lau

The Hang Seng Index fell 3.41 per cent or 670 points to 18,965.81.

11:09 am By Jessie Lau

The Hang Seng Index fell 3.14 per cent or 616.77 points to 19,019.04, the Hang Seng China Enterprises index dropped 3.18 per cent or 266.41 points to 8,111.39.

Meantime, the Shanghai Composite Index traded at 2,982.98, down 0.82 per cent or 24.76 points. The CSI 300 lost 1.04 per cent or 33.54 points to 3,189.59.

The Shenzhen Composite Index moved down 0.34 per cent or 6.4 points to 1,889.35, and the Nasdaq-style ChiNext traded 0.83 per cent lower, or down 18.52 points, to 2,223.18.

11:00 am By Jessie Lau

Shares of Hong Kong property developers plunged, as speculations grow that Hong Kong might raise interest rates to halt the local currency’s depreciation. CK Property sank 5.599 per cent to HK$42.15, Henderson Land skidded 3.143 per cent to HK$41.6, Hang Lung Group declined 2.44 per cent to HK$21.95, and New World Development fell 3.075 per cent to HK$6.62.

10:34 am By Jessie Lau

The Hang Seng Index fell 2.3 per cent or 451.75 points to 19,184.06, and the Hang Seng China Enterprises index shed 2.28 per cent or 190.77 points to 8,187.03.

However, the Shanghai Composite Index rose 0.07 per cent or 1.99 points to 3,009.73, while the CSI300, which tracks the large caps listed in Shanghai and Shenzhen, dropped 0.18 per cent or 5.85 points to 3,217.28.

The Shenzhen Composite Index rose 0.42 per cent or 8.03 points to 1,903.78, and the Nasdaq style ChiNext added 0.07 per cent or 1.62 points to 2,243.32.

10:33 am By Enoch Yiu

Offshore yuan continued falling Wednesday morning, trading at 6.5999, down 0.15 per cent from Tuesday.

Onshore yuan was unchanged at 6.5784. The currency gained 0.01 per cent on Tuesday.

The spread between the onshore and offshore yuan has narrowed down to 275 basis points, down from a record 1,400 basis points on January 7.

10:32 am By Laura He

Shanghai stocks had a wary start Wednesday morning, following a 3.2 per cent jump in the previous session, triggered by hopes of further stimulus after China’s GDP growth in 2015 marks the weakest in 25 years. However, some analysts expected Chinese equities to drop well below the current 3,000 level after the bursting of stock bubble.

“The Shanghai Composite does look a bit precarious after its 3 per cent gain and its retaking of the 3000 level yesterday. Personally, I think a trip down to 2500 still seems likely, and is probably needed to purge some of the ‘irrational exuberance’ of the market in 2015,” Angus Nicholson, an analyst from IG Group, said Wednesday.

He also expected China’s economic slowdown to push commodity prices lower.

“Chinese data yesterday made it pretty clear that momentum in its economic activity would steadily decline into 2016,” he said, “A lot of planned fiscal spending for Q1 2016 was brought forward into Q3/Q4 2015, which means investment spending could decline quite sharply in 1H 2016.”

“This will undoubtedly affect Chinese demand for commodities,” Nicholson noted.

In particular, he predicted a sharp fall in iron ore prices in a month or two, due to a rise in Chinese iron ore stockpiles and the iron price.

China iron ore stockpiles. Chart: Angus Nicholson.

10:02 am By Enoch Yiu

Hong Kong dollar fell for a fifth day in a row to 7.8218, the lowest level since August 2007. The stock market slump, the weak economy and the US interest rate rise have caused capital outflows and led the local currency to fall.

9:45 am By Enoch Yiu

The People’s Bank of China set Wednesday the yuan’s mid-price against the US dollar at 6.5578, 18 basis points stronger than on Tuesday, when it set the mid-price 6 basis points weaker.

It also set the yuan’s mid-price against the euro weaker by 140 basis points to 7.1627, and the yuan’s reference rate for every 100 yen stronger by 50 basis points at 5.5834. The yuan’s mid-price against the pound was set 653 basis points stronger at 9.2987.

Traders are allowed to trade up to 2 per cent either side of the mid-price for the day.

9:40 am By Jessie Lau

The Hang Seng Index opened at 19,332.22, down 1.55 per cent or 303.59 points from Tuesday, while the Hang Seng China Enterprises index fell 2.11 per cent or 176.73 points to 8,201.07.

The Shanghai Composite Index opened at 2,993.01, down 0.49 per cent or 14.72 points, and the CSI300 — which tracks the large caps listed in Shanghai and Shenzhen — fell 0.40 per cent or 12.97 points to 3,210.16.

The Shenzhen Composite Index fell 0.34 per cent or 6.5 points to 18,89.24 while the Nasdaq style ChiNext dropped 0.65 per cent or 14.64 points to 2,227.06.

9:08 am By Jessie Lau

Hong Kong’s stock market is poised to open higher on Wednesday, as the Hang Seng Index futures spot January contract gained 0.01 per cent to 19,622 in the pre-trade session, while H-share index futures fell 1.86 per cent to 8,227.

US stocks posted mixed performance on Tuesday, after oil prices tumbled further. The S&P 500 index was up 0.05 per cent or 1 point at 1,881.33. The Dow Jones Industrial Average closed up 0.17 per cent or 27.94 points at 16,016.02. The Nasdaq Composite finished down 0.26 per cent or 11.47 points at 4,476.95.

Hong Kong dollar falls to weakest level since 2007, with analysts predicting it will test 7.83
Offshore yuan also falls

The Hong Kong dollar fell for the fifth day in a row on Wednesday morning to 7.8226, the lowest level since August 2007.



The stock market slump, the weak economy and the US interest rate rise have led to capital outflow, causing the local currency to fall.