Chart of the Day: Bear Market Grips Hong Kong Stocks
Hong Kong’s Hang Seng Index entered a bear market on Tuesday after the benchmark finished the day down more than 20% from a recent high in January.
The index closed at 26,422.55 on Tuesday, plumbing a low not seen since July 2017.
A stock market typically enters a bear market after it falls more than 20% from its recent high. This year’s plunge in the Hang Seng mirrors the drop in the Chinese mainland’s benchmark Shanghai Stock Exchange Composite Index, which has been in a bear market since June. Index compiler MSCI’s flagship emerging markets index entered a bear market in August.
The Shanghai index has fallen more than 25% since its January high as China’s economic growth has slowed and a trade war has broken out with the U.S.
Shares of Tencent Holdings Ltd., a heavyweight among the Hang Seng’s 50 constituent stocks, have fallen 35% since January, wiping out about $200 billion in market value. The gaming giant has attempted to halt the skid by launching its first share buyback in four years.
Tumbling casino stocks were among the Hang Seng’s other biggest decliners as the mainland’s slowing economic growth has left a cloud over Macau’s gambling industry. Shares of leading Macau casino operators Sands China Ltd. and Galaxy Entertainment Group Ltd. have fallen 14.4% and 21.6% respectively since Sept. 4.
Contact reporter Charlotte Yang (firstname.lastname@example.org)
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