Hong Kong Stocks Drop To 3-Month Low

November 14, 2016

NewsStandOnline.Net (14-November-2016): Hong Kong stocks declined, dragging the benchmark index to a three-month low, as property companies tumbled amid concern borrowing costs will rise.

The Hang Seng Index lost 1.4 percent to close at its lowest level since 5th August.

A gauge of real estate companies traded in the city extended their worst week in four years amid speculation a faster pace of U.S. interest-rate hikes under Donald Trump and higher taxes will curb demand for housing.

The Shanghai Composite Index gained 0.5 percent at the close to extend a bull market rally.

hong-kong-stocks-drop-to-3-month-low

While stocks in Hong Kong have slumped almost 8 percent from their September high as Trump’s unexpected victory last week roiled markets, mainland equities, which are less exposed to global events, have climbed to their highest level since January.

Data showing China’s economy held ground last month, with industrial production climbing 6.1 percent from a year earlier, added to support for Shanghai shares.

“The liquidity problem has been weighing on Hong Kong stocks as the possibility of an interest-rate increase next month is increasing,” said Cliff Zhao, a Hong Kong-based strategist at China Merchants Securities Co.

The Hang Seng Index slid to 22,222.22. The Hang Seng China Enterprises Index retreated 1 percent. The Shanghai Composite’s 14-day relative strength index climbed to 71, above the 70 level that signals to some traders that shares are overbought.