Update | Hong Kong stocks suffer worst Chinese New Year debut since 1994
First day of the Year of the Monkey brings ill fortune for investors
Hong Kong stocks closed sharply lower on the first trading day of the Year of Monkey on Thursday, posting the worst loss to start a lunar new year since 1994, as traders fled equities for safe-haven assets over fears on declining oil prices, capital outflows from China, and dim economic outlook.
The Hang Seng Index sank 3.9 per cent or 742.37 points to close at 18,545.80. The Hang Seng China Enterprises index, or the H-shares index, finished off 4.9 per cent or 396.95 points at 7,657.92.
“It is not a surprise to see the stock market fell as the regional and global stock markets have been down during the Lunar New Year,” said Chow Chung Kong, chairman of Hong Kong Exchanges and Clearing.
Chow said investors were worried about declining commodity prices, capital outflows spurred by currency fluctuations, and the impact of China’s economic slowdown on the world economy.
“Growth is continuing its structural slowdown and weak property investment, industrial overcapacity, and labour market stresses will continue to exert downward pressure on the economy ...”
Alex Wolf, an economist for emerging markets at Standard Life Investments, also cautioned Thursday that it may be hard for China to reach its 2016 growth target range of 6.5 per cent to 7 per cent, as it faces serious challenges including sluggish property market, overcrowded industrial sector and weak labour market.
