You are here

Hong Kong stock market closes early as tropical storm approaches

[SHANGHAI] A tropical storm shut Hong Kong's financial markets early for the first time in almost two years, adding chaos to a city which has been wracked by protests for weeks.

The Hong Kong Observatory raised the storm signal No 8 at 1.40pm local time, prompting the city's stock exchange to suspend trading 15 minutes after the signal was raised, as required by its rules. The Hang Seng Index, which normally closes after 4pm, ended the session 1.3 per cent lower.

"There's a lot happening this week that's keeping investors on the sidelines and adding to their cautious sentiment," Linus Yip, a strategist with First Shanghai Securities Ltd. "Local stocks are under pressure amid uncertainties in Hong Kong and their performance is the main drag on the market. No one dares to bottom fish stocks right now."

Tropical storm Wipha was centred about 340 kilometres south of Hong Kong as at 2pm local time, and is forecast to move towards the vicinity of western Guangdong province, according to the Observatory. Wipha will be closest to the city later on Wednesday, meaning storm signal No 8 is expected to remain in force for most of the day, it said.

sentifi.com

Market voices on:

Airlines including Cathay Pacific Airways Ltd and Hong Kong Airlines Ltd have warned passengers of potential flight delays or cancellations as the storm approaches. Hundreds of workers are trying to get onto trains at station in the Central business district before bus and ferry services are suspended. Roads were jammed with traffic as workers sought to get home early.

Train services continue and trains on the Island line, which cuts through the city's financial centre, are running at two-minute intervals, MTR Corp said.

The city's statistics office said the storm signal won't affect the release time of gross domestic product data, scheduled for 4.30pm. Hong Kong Chief Executive Carrie Lam said on Tuesday there's "no room for optimism for the second quarter and the entire year", according to a government statement citing her remarks at a luncheon.

Wednesday's weather disruption comes at a particularly bad time for Hong Kong. Eight consecutive weekends of unrest in the city have driven away tourists and forced retailers to close some stores in the city's busiest areas, hitting sales of jewelry and cosmetics. It has also affected landlords' ability to raise rents.

"Lots of stocks, especially heavyweights, are being sold off, including developers and consumer-related stocks," said Castor Pang, head of research at Core Pacific-Yamaichi International in Hong Kong. "That's a signal that many long funds are pulling out of the market."

The stock declines reflect growing frustration over Hong Kong's political impasse. Investors on Monday sold the city's shares at the fastest rate in more than six weeks, after protesters clashed with police for an eighth weekend. Traders are worried the violence will disrupt the local economy, and a rare press briefing by Beijing did little to ease their concerns.

The MSCI Hong Kong Index fell for a sixth day on Wednesday, the longest losing streak in more than a year. It's down 3 per cent this month as protests intensified.

BLOOMBERG