Xiaomi, Tencent hit as Hong Kong stocks, weighed down by Trump impeachment inquiry, fall to biggest daily decline in a month
- Hang Seng Index closes 1.28 per cent lower at 25,945.35
- Shanghai Composite Index closes 1 per cent down at 2,955.4
Risk-off sentiment prevailed in the Hong Kong and mainland China stock markets on Wednesday, following news overnight of an impeachment inquiry against US President Donald Trump, leading to the Hang Seng’s biggest daily decline in a month.
The Hong Kong benchmark closed 1.28 per cent lower at 25,945.35, dragged down by a broad decline across sectors – the usually safe health care stocks and technology shares were among the biggest losers. Wednesday’s drop was the index’s biggest since August 26 this year, when it fell by 1.9 per cent.
Index heavyweight Sino Biopharmaceutical Limited plunged by 5.3 per cent to HK$9.9, while CSPC Pharmaceutical Group lost 3.8 per cent to HK$15.6.
The declines came as analysts at Moody’s Investor Service said on Wednesday China’s ongoing reform of bulk purchase of drugs will boost sales of drug makers, but might squeeze their profits as competition to be included in a purchase list could lead to a price war.
Among the technology heavyweights to decline on Wednesday were Xiaomi, the world’s fourth-largest smartphone maker, as well as Apple supplier AAC Technologies, which dropped 4.4 per cent to HK$8.9 and 3.5 per cent to HK$41.8, respectively. Chinese social media and gaming giant Tencent Holdings was another casualty, dropping 2.1 per cent to HK$328.6.
“The [Trump] impeachment hearing certainly brings a negative flow of news headlines. But we do not expect it to introduce a fundamental change to the Hong Kong market,” said Kevin Leung, executive director of investment strategy at Haitong International Securities.
