February 22, 2024

Hong Kong’s Hang Seng Index Plunges Due To Heavyweights

On Monday, there was a 3% decline in the Hang Seng index of Hong Kong due to heavyweights Alibaba and Tencent, as news of China imposing fines on the companies hit the market. During the trading session, the benchmark index had plunged by 3.3% and ended the day at 21,124.2, which was lower by 2.7%. The Hang Seng Tech index, recorded a decline of 3.86% for the day.

China imposes fines

Reports indicated that a number of companies had been fined by China, including tech giants like Tencent and Alibaba, for not following the anti-monopoly rules applicable to transactions’ disclosure. The shares of Alibaba and Tencent listed in Hong Kong plunged by 5.79% and 2.89%, respectively.

Hong Kong also saw casino stocks take a nosedive after news that Macao was shutting down all industrial and commercial businesses for a week in order to control the rising cases of COVID-19. There was a 6.68% drop in Hong Kong shares of Wynn Macau, a 7.13% fall in Melco International Development was recorded and there was also an 8.15% dip in Sands China.

China markets

As far as mainland Chinese markets are concerned, they were trading lower. There was a 1.27% drop in the Shanghai Composite, which brought it to 3,313.58, while a 1.87% fall was seen in the Shenzhen Component, which came down to 12,617.23. Tracking the largest stocks listed on the mainland, the CSI 300 index fell by 1.67%.

China is dealing with increasing COVID-19 concerns, as a new subvariant of the Omicron strain was reportedly identified in Shanghai. There was also a 6.1% rise in producer inflation in China last month, as opposed to the same period a year earlier. This was a bit above the 6% expected rate, but less than the 6.4% rise recorded in May.

There was also a 2.5% rise in consumer inflation a year earlier, which was a tad higher than the 2.4% predicted.

Asia-Pacific markets

In other areas, there was a rise of about 2% in the Japanese Nikkei 225 index and it ended the day higher by 1.11% at 26,812.3. Meanwhile, a 1.44% gain was recorded in the Topix index, which brought it to $1,914.66. It is expected that the ruling coalition in Japan will see its majority in the upper house increase.

There was a 1.14% drop in the Australian S&P/ASX 200 index, which brought it to 6,602.2. Morning trading saw the South Korean indexes see-sawing, with the Kosdaq reaching a flatline at 767.04, while a 0.44% drop was seen in the Kospi. There was also a 1.81% drop in the MSCI’s index of Asia-Pacific shares not including Japan.

Malaysian and Singaporean markets were closed on Monday for a holiday.

Investors will now be focusing on the slew of data expected this week, including the US inflation numbers, along with China’s retail sales, industrial production, and GDP data. This week will also see earnings season kick-off, which can have a big impact on future predictions.

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