You are here
Hong Kong: Shares dip, but recovery in mainland market calms jitters
[HONG KONG] Hong Kong stocks dipped on Monday, with investor sentiment soothed after mainland markets ended a volatile session in positive territory.
The Hang Seng index fell 0.3 per cent, to 21,996.42, while the China Enterprises Index lost 0.7 per cent, to 9,790.64 points.
For the month, the Hang Seng declined 2.8 per cent.
Last week, Hong Kong stocks posted their biggest weekly drop in two months, partly hit by a Friday tumble in mainland shares. But fears eased on Monday as China's benchmark indexes managed to recoup earlier losses by the close.
Some analysts, however, say Hong Kong stocks are getting less and less attractive to investors due to the city's economic troubles and further financial deregulation in China.
The yuan's expected inclusion into the International Monetary Fund's (IMF) reserve currency basket, as well as ongoing market reform, "will mean that mainland stocks will gradually become more accessible to foreign investors. As such, Hong Kong's role as a Chinese investment proxy is gradually subsiding," wrote Hong Hao, managing director of research at BOCOM International. "Compounded by its own economic headwinds ... the Hang Seng is heading into very strong (technical) resistance." Most sectors were down, but IT and consumer stocks strengthened.