HONG KONG: Hong Kong shares tumbled 2.76 percent to a more than two-year low on Monday after European leaders failed to agree on a way to deal with Greece's debt crisis. The benchmark Hang Seng Index fell 537.36 points to 18,917.95 on turnover of HK$53.55 billion ($6.9 billion). The index is at its lowest since July 2009.
Asian markets fell after EU finance ministers said after a meeting Friday they would delay a decision on eight billion euros ($11 billion) of bailout cash for Greece, which it cannot tap until has proved it is on track to cut its deficit. The meeting in Poland also highlighted divisions between Europe and the United States over the best way forward for the eurozone, raising fears of another global financial crisis if the problems cannot be resolved.
Analysts said trading activity was also subdued as the market looked to the outcome on Wednesday of a US Federal Reserve policy committee meeting. "Investors are focusing on the upcoming (Federal Open Market Committee) meeting for any additional measure from the US Federal Reserve to support the ailing US economy," said Eugene Law, sales director at Convoy International Services. Blue-chip exporter Li & Fung fell 8.4 percent to HK$13.02 on lingering worries about the economy in the United States, its key export market.
Hong Kong property developers also fell after a weekend of poor property sales. Cheung Kong shed 4.1 percent to HK$96.75 and Sun Hung Kai Properties retreated 2.2 percent to HK$100.90. Chinese shares fell 1.79 percent. The Shanghai Composite Index, which covers both A and B shares, lost 44.54 points to 2,437.80 on turnover of 48.6 billion yuan ($7.6 billion). The market posted its lowest finish since July 2010. Dealers sold stocks on fears that an expected initial public offering by Sinohydro Group, a Chinese hydropower station builder that constructed the Three Gorges Dam, would lead to tighter liquidity in the market.
The listing is expected to be the biggest in the country so far this year. "There's a lack of investor confidence recently," Li Lei, an analyst at Gold State Securities, told Dow Jones Newswires. Property developers fell on concerns monetary tightening by Beijing, which is struggling to control stubbornly high inflation, could hurt sales during the traditional peak season in September. China Vanke was down 3.5 percent at 7.78 yuan and Poly Real Estate Group declined 5.3 percent to 10.27 yuan. Energy firms fell on fears that higher coal prices will lower margins. China Shenhua Energy slid 2.1 percent to 25.19 yuan and China Coal Energy declined 5.9 percent to 9.02 yuan.
Copyright AFP (Agence France-Presse), 2011
Comments
Comments are closed.