The Hang Seng Index was down 0.77 per cent or 168.87 points to 21,851.88 on Monday morning session close.
Shares in Hong Kong and mainland China declined at the mi-day trading pause, following retreats in most Asian equity markets as rate increases announced last week by the US Federal Reserve and Hong Kong Monetary Authority lead to capital outflow back to American shores.
“With the higher rates in US,Hong Kong stocks could be under pressure as capital could flow out of Hong Kong ,” said Ben Kwong Man-bun, executive director of KGI Asia.
Insurers led losses among Chinese companies on the Hang Seng China Enterprises Index, amid concerns that mainland regulators will further place their market investments under scrutiny.
Ping An Insurance Group Co. fell 1.7 per cent to a four-month low of HK$39.75 while AIA Group Ltd fell 1.5 per cent to HK$43.75.
China Vanke Co. fell in Shenzhen and Hong Kong after the country’s largest property developer scrapped a white knight rescue plan involving Shenzhen Metro, which was intended to help defend it from a hostile takeover.
Vanke shares fell by as much as 6.3 per cent, closing 4.5 per cent lower at HK$18.48 during the lunch pause. In Shenzhen, Vanke’s shares fell as much as 5.3 per cent, dropping 4.7 per cent to 21.40 yuan.
The Shanghai Composite Index dropped 0.1 per cent to 3,119.65. The Shenzhen Component index dropped 0.26 to 10,307.48, while the Shenzhen Composite Index declined 0.21 per cent to 1,987.49.
The Nasdaq style ChiNext closed 0.60 per cent lower at 1,986.22.
China’s monetary policy will be pursued in a “neutral” manner in the coming year, a departure from last year’s “flexible” stance, according to an analysis by Macquarie Capital’s Larry Hu, parsing the Communist Party’s Central Economic Work Conference last Friday. Read the rest of this entry »