Update | Market woe continues as Hang Seng Index closes below 20,000 for first time since 2013 - and more doom could lie ahead
Shanghai benchmark thuds more than 5 per cent lower to end at a four-month low
Confusing policy stances, weak economic fundamentals, and fears over a new financial crisis fuelled an equity sell-off on Monday, dragging major benchmark Indexes in Hong Kong and mainland China lower, while analysts mused about likely further declines ahead.
The Hong Kong benchmark tumbled 2.76 per cent, or 565.21 points to 19,888.50. The closing level represents the first sub-20,000 point level finish for the Hang Seng since 2013. The Hang Seng China Enterprises Index, tracking mainland-based companies, dropped 3.85 per cent, or 340.73 points to 8,505.16, its lowest closing level since October 2011.
The Shanghai Composite Index plunged 5.33 per cent, or 169.71 points, to 3,016.70 , the lowest level since mid September.
Investors are concerned about China risks spilling over, said Hong Hao, chief strategist with Bocom International.
“The circuit breaker imposed last week triggered a trading suspension when the aggressive selling and accompanying plunge in stock prices took place. But the bearish sentiments were not fully released in that way. And now that it is scrapped, we are seeing the continuing bearishness (in stock prices).”
