One of the biggest stock markets for Chinese companies teetered on the edge of a bear market on Wednesday, following more bleak data from China, the Asian growth engine.
Hong Kong’s Hang Seng Index HSI finished 1.9% lower at 18,234.27 — a 19.6% drop from its closing high of 22688.90 on January 27. A 20% drop from a recent closing high is one definition of a bear market. “[The] HSI [Hang Seng Index] is typically viewed as the critical vehicle for foreign investors to gain exposure to China. If this pipeline dries up, we could enter a bottomless pit scenario. That is a bit of an exaggeration, but international investors will stay home and wait for an extended fire sale to ensue before bottoming feeding,” Stephen Innes, managing partner at SPI Asset Management, told clients in a note.
He said they don’t expect any new meaningful stimulus, and while domestic flights and subway ridership is up, the situation is starkly different from what was seen elsewhere post-COVID.Chinese consumers didn’t enjoy significant cash transfers during COVID lockdowns, and there are reports of wage cuts in certain industries. The property market has stabilized, post the sharp fall in activity, but new land sales are lower 30% ytd [year to date].
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Source: CNBC - 🏆 12. / 72 Read more »