Hong Kong shares fell 2 percent on Friday, dragged down by a sell-off in internet-related shares and fears over the impact of rising tensions between the United States and North Korea. The Hang Seng index fell 2.0 percent, to 26,883.51, while the China Enterprises Index lost 1.9 percent, to 10,572.97 points. The losses on Friday brought the Hang Seng down 2.5 percent for the week, making for its worst weekly performance this year.
Losses were broad-based, with consumer cyclicals and technology sectors racking up the steepest declines. "A lot of it has to do with the geopolitical risk between the US and North Korea," said Mitchell Kim, at Maybank Kim Eng in Hong Kong, referring to global market declines. "It's making a round trip back to Asia." Kim said a market correction was due after significant gains this year, and that tensions over North Korea came at a critical moment.
"The timing was kind of a perfect storm in that sense," he said. After gaining for the past three weeks and reaching record highs this week, shares in Tencent Holdings Co fell 4.9 percent on Friday. The company's shares were hit by news that China's cyber regulator was investigating Tencent's WeChat, Weibo Corp and Baidu Inc's forum site Tieba over suspected violations of the country's strict cybersecurity laws.
Geely Automobile Holdings Ltd, which posted strong July sales growth earlier this week, fell 4.5 percent. The index measuring price differences between dual-listed companies in Shanghai and Hong Kong stood at 129.28. A value above 100 indicates Shanghai shares are pricing at a premium to shares in the same company trading in Hong Kong, and vice versa.
Comments
Comments are closed.