Hong Kong stocks dip to 1-month low as slumping oil prices feed slowdown fears
Chinese oil producers Sinopec and CNOOC led the decline after prices fell more than 4 per cent overnight to an almost three-year low
The Hang Seng Index fell 0.7 per cent to 17,108.71 at the close, the lowest level since August 9. The Hang Seng Tech Index rose less than 0.1 per cent, and the Shanghai Composite Index retreated 0.8 per cent.
China Petroleum and Chemical, also known as Sinopec, led the pack of decliners after crude futures tumbled by more than 4 per cent overnight to an almost three-year low. Chinese sportswear maker Li Ning slid after Citigroup downgraded its recommendation on the stock. Biotech firm Wuxi AppTec and electric-vehicle (EV) maker BYD rallied on share buy-back and stake increase plans.
Crude oil futures have tumbled by almost a fifth this year on concern that demand from China and the US, the world’s biggest consumers, will slow down at a time when supply from Opec members remains sufficient.
“The big question is whether these price declines should be read as a sign of doom and gloom,” said Stephen Innes, managing director at SPI Asset Management in Bangkok. “One thing’s for sure: the Fed might want to take a closer look at the collapse in oil prices. It’s a clear sign of disinflationary pressures building in the system. Weak global demand and sluggish economic activity are warning signs for riskier assets.”
