Update | Technology shares lead slump in Hong Kong after overnight rout in US equities
Prospect of People’s Bank of China loosening monetary policies cushions declines in Shanghai Composite Index
Hong Kong stocks fell on Wednesday, tracking a rout in US equities roiled by a sell-off in technology companies and rising bond yields.
The Hang Seng Index dropped by 1 per cent, or 308.09 points, to 30,328.15 by close of trading on Wednesday. The Hang Seng China Enterprises Index, or the H-share gauge, also declined by 1.2 per cent. The mainland’s benchmark gauge fared slightly better with a 0.4 per cent loss, as negative sentiment was partially offset by the prospect that China’s central bank will loosen monetary policies.
Other major markets in Asia – Japan, South Korea and Taiwan – also fell, with benchmarks in these regions shedding at least 0.4 per cent. Technology stocks fared badly across the board.
US stocks tumbled in overnight trading as technology and industrial shares bore the brunt of selling, and the yield on 10-year treasury bonds rose above 3 per cent for the first time in four years. The Dow Jones Industrial Average and the Nasdaq Composite Index both dropped 1.7 per cent, while the S&P 500 Index retreated by 1.3 per cent.
Technology companies were among the worst performers on the Hang Seng Index too. Apple suppliers Sunny Optical Technology (Group) fell by 3.1 per cent to HK$130.70 (US$16.65) and AAC Technologies Holdings declined by 1.3 per cent to HK$117.40. Tencent Holdings shed 2.5 per cent to HK$386.80.
“Technology shares have dropped significantly, partly because the US market is still fluctuating and investors do not feel positive,” said Gordon Tsui, the head of fixed income at Talking Asset Management.
