Hong Kong stocks tank as US orders China’s Houston consulate to close within 72 hours
- Tumble began on fears of worsening tensions, with Hong Kong’s benchmark closing down 2.3 per cent
- US-China tensions return as main driver of market sentiment, swinging suddenly from Tuesday when optimism had sent stocks soaring
Hong Kong stocks tumbled in late trading on Wednesday as US-China tensions escalated after the US ordered China’s consulate in the city of Houston to close within 72 hours.
US news outlets reported that a State Department official confirmed it had ordered the consulate closed, citing concern about American intellectual property and the privacy of its citizens. There was no immediate statement on the State Department website. But Houston media reported that local police and fire officials had responded to reports that documents were being torched in the consulate’s courtyard, citing local police.
The Hang Seng Index, which had gains in the early session before turning down some before and after the lunch break, began sliding hard on the news over the consulate, closing down by 2.3 per cent – or a loss of 577.72 points – to 25,057.94. That was its worst fall in six weeks, when it essentially fell by the same percentage. Of the 50 members of the benchmark, 46 posted losses.
“The market is panicking about the surprising action taken by the US, and worrying about tensions further escalating and the revenge by China,” Alan Li, portfolio manager at Atta Capital, said of the Hang Seng benchmark, which began sliding at about 3:22pm and quickly accelerated.
