Hong Kong stocks fell for a fourth straight day, their longest losing streak in six weeks, on concerns there will be more protests ahead of China’s National Day.
The Hang Seng Index dropped 1.1 per cent to 26,468.95 at the close on Thursday. The four-day decline was the longest since a stretch of five days that ended on August 6. Cosmetics retailer Sa Sa International Holdings said the civil unrest in the city was hurting its sales.
Concerns were running high that more demonstrations will be organised in the build-up to China’s National Day holiday that falls on October 1. The Hong Kong government said this week that it would not concede to other demands by the protesters after withdrawing the controversial extradition bill that sparked the crisis.
“The internal systemic risk facing the Hong Kong market is still there,” said Ken Chen Hao, a strategist at KGI Securities in Shanghai. “The market seems to be beginning to price in the political risk of more uprisings ahead of the National Day holiday.”
A 25 basis-point cut in the benchmark interest rate by the Federal Reserve, duplicated in Hong Kong, failed to ease selling, as analysts said the move had been widely expected.
The rate cut “was in line with the consensus forecast and market pricing ahead of the meeting,” said Daragh Maher, head of US forex strategy at HSBC Holdings. “Expectations for the scale of easing had been pared back in recent weeks on the back of some Fed rhetoric which had downplayed the need for anything more aggressive.”
Insurer AIA Group and Hang Seng Bank were the worst performers on the Hang Seng Index on Thursday, falling at least 2.4 per cent.
Sa Sa joined apparel retailers Bossini International Holdings and Esprit Holdings, and restaurant operator Fulum Group, as the latest victims of the biggest civic upheaval since the city’s handover in 1997.
Sa Sa dropped by as much as 2.3 per cent in intraday trading after saying sales fell by about 15 per cent from a year earlier in the five months ending in August. Revenues decrease 28 per cent last month alone, it said.
The retailer blamed the weaker sales on the social unrest that has deterred mainland tourists and dented consumer spending. The stock had recouped the loss at the close, finishing 1.2 per cent higher at HK$1.73.
China’s Shanghai Composite Index fared better, mainly thanks to a late rally, as traders shifted their focus to the forthcoming release of the prime rate on loans for signals of further policy easing. The index rose 0.5 per cent to 2,999.28 for a second day of gains.
The loan prime rate, which is now released on a monthly basis after an overhaul by the central bank last month, is due on Friday. The 1-year charge on the borrowing cost will probably fall by five basis points to 4.20, according to a Bloomberg survey.
Tianjin Printronics Circuit jumped by the 10 per cent daily limit to 12.71 yuan in Shenzhen on a plan by its parent company to start mixed-ownership reforms.
Tianjin Zhonghuan Electronic and Information Group, which has a 25 per cent stake in the listed company, began the process of asset checks, auditing and evaluation ahead of the move, according to an exchange statement.
More from South China Morning Post:
- Cosmetics chain Sa Sa posts decline in half-yearly profits on weak retail sales
- Hong Kong Airlines to reduce number of flights as protests take toll on carriers
This article Hong Kong stocks hit longest losing streak in six weeks as investors fear more protests on the way first appeared on South China Morning Post