22 January 2019

HSI falls off saddle on first trading day of Year of the Horse

Hong Kong stocks followed overseas peers when they resumed trading on Tuesday after the Lunar New Year holidays, closing with sharp losses as market sentiment turned sour after shares plunged on Wall Street over weak US economic data.

The benchmark Hang Seng Index tumbled 637 points or 2.89 percent to finish at 21,397, its lowest since mid-July. The Hang Seng China Enterprises Index, the main gauge for H shares, dived 3.14 percent to 9,509 points. The Shanghai Composite index closed 0.82 percent lower at 2,033 points.

Most blue chips closed in the red. Lenovo (00992.HK) came under heavy selling pressure after announcing its purchase of Motorola Mobility from Google for US$2.91 billion, a deal that drew bearish reaction from analysts. The counter slumped 16.4 percent, making it the worst-performing blue chip. Some HK$26.5 billion (US$4.37 billion) of its market capital has vaporized in just two trading days.

Galaxy Entertainment (00027.HK) and Tencent (00700.HK) followed closely behind, both falling more than 6 percent when the market closed. All Chinese lenders also saw notable declines.

As panic selling crept in, funds piled into defensive stocks. Power Assets Holdings (00006.HK) closed 2.8 percent higher.

Meanwhile, investors snapped up handset makers and related firms. Coolpad (02369.HK) jumped more than 4 percent, SIM Technology Group (02000.HK) was up 2.7 percent and Tongda Group Holdings (00698.HK) ended 2.4 percent higher.

– Contact the writer at [email protected]



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