Hong Kong joins the world in stock sell-off but China rallies with a little help from...

Hong Kong stocks fell on Thursday as gloomy global economic outlook continued to weigh on sentiments but Chinese markets managed to buck the trend with a sharp recovery after a three-day losing streak, with regulators clamping down on share sales.

US markets tumbled overnight followed by a region-wide slump as investors switched out of shares for safer assets amid the continuing plunge in oil prices. Hong Kong’s benchmark Hang Seng Index closed down 0.59 per cent to 19,817.41, the lowest level in more than three years. The H-share Index tracking China-based companies slipped 0.41 per cent to 8,459.63.

Brokers said the Hang Seng Index is likely to hover around 19,000 to 20,000 until risk appetite improves. Investors are “staying on the sidelines” while those still active in the markets are gravitating towards more defensive stocks, said Ben Kwong Man-bun, executive director at brokerage firm KGI Asia.

“Cash is king” at the moment, said Francis Lun, chief executive of GEO Securities in Hong Kong.

Investors pessimistic about the global economy are unlikely to start buying again until markets fall further, Lun said, adding that in Hong Kong, that means the 19,000-level.