Hang Seng Index back below its 50-day moving average earlier this week, just days after rising above it. While the Hang Seng Index tiptoed into a slim gain Friday, the gauge was heading for a weekly decline of 3.3% as of 11:33 a.m.Local unrest and the trade war have conspired to drag shares lower, while the Federal Reserve’s rate cut this week was seen unlikely to feed into the cost of credit for businesses and households in a city whose dollar peg means that it imports US monetary policy.
Fitch Ratings Inc. this month downgraded Hong Kong as an issuer of long-term foreign currency debt for the first time since 1995. “The protests are the biggest drag on sentiment and unless that issue is resolved the market will remain weak,” said Alvin Cheung, associate director of Prudential Brokerage Ltd.
“The government expects a big hit to the city’s economy in the second half, and that could filter through to corporate earnings and weigh on the Hang Seng Index.“ MTR Corp. was heading for a 5-day decline of 2.5%, ending a week during which one of its trains derailed in Hong Kong, dealing a fresh blow for the developer and subway operator that has become a target and battleground in the anti-Beijing demonstrations rocking the city.Subscribe to our newsletter and get news delivered to your mailbox.