Hong Kong stocks hit 2-week low amid US, regional market turmoil
Traders shifted to a risk-off mode amid weak US manufacturing data and a surge in the Japanese yen.
The Hang Seng Index fell 1.1 per cent to 17,457.34, the lowest close since August 21. The Hang Seng Tech Index dropped 0.4 per cent, and the Shanghai Composite Index retreated 0.7 per cent.
Japan’s Nikkei 225 slumped 4.2 per cent and Taiwan’s Taiex tumbled 4.5 per cent as the worst performers in Asia. That followed a 2.1 per cent decline in the S&P 500 overnight for its steepest drop since August, with the VIX Index – the so-called fear gauge – surging. AI chip maker Nvidia lost a record US$279 billion in market value.
Traders shifted to a risk-off mode after a report showed that US manufacturing activity shrank for a fifth straight month in August, overshadowing the Goldilocks scenario of resilient growth and low inflation.
Meanwhile, Japan’s central bank maintained its hawkish rhetoric on monetary policy, reiterating that it will keep raising borrowing costs should economic growth and inflation continue to pick up. The comment fuelled the strengthening of the yen, risking further unravelling of the carry trade that roiled global financial markets last month. The Japanese currency appreciated 0.3 per cent against the US dollar on Wednesday, extending a 1 per cent gain a day earlier.
