Publications
Partners
Hong Kong - Hong Kong stocks rose, led by a rebound in shares that had driven a slump on Thursday.
The Hang Seng Index advanced 1% as of 08:26 as Industrial & Commercial Bank of China and Ping An Insurance climbed at least 2.3%. Geely Automobile added 5.2% after slumping more than 7% a day earlier. The measure lost as much as 2.2% on Thursday, its biggest retreat since November, and closed 1.9% lower.
The turbulence broke a sense of bullish calm that’s prevailed throughout this year in Hong Kong’s stock market, with the benchmark index jumping 31% through Wednesday in Asia’s best performance. Previous bouts of weakness in 2017 have proved to be good opportunities to pick up stocks in Asia’s top-performing measure, with the gauge repeatedly bouncing off its 50-day moving average.
Traders attributed Thursday’s declines to concerns ranging from the risks of Chinese deleveraging to a surge in the city’s interbank rates. Adding to jitters - on the 30th anniversary of the Black Monday stock market crash - was People’s Bank of China Governor Zhou Xiaochuan warning about a possible " Minsky Moment," a plunge in asset values following unsustainable gains.
Derivatives also played a part, with Kenny Wen, a strategist at Sun Hung Kai Financial, saying the intraday termination of callable bull/bear contracts - a popular derivative in Hong Kong that allows investors to make leveraged bets - exacerbated the decline.
The Hang Seng China Enterprises Index advanced 1.5% after sliding the most this year on a closing basis a day earlier.
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.
Read Fin24's top stories trending on Twitter: Fin24’s top stories
