Hang Seng Index Drops 1.3% Following Overnight Losses In New York

Li Chen
04 Sep, 2024
Hong Kong

Market indexes in Hong Kong and Shanghai dropped following overnight losses in New York after fears of a U.S. economic slowdown resurfaced. 

The Hang Seng index dropped 1% and the mainland China-focused CSI 300 index declined 0.4%, tracking losses on Wall Street and that rippled to markets in Europe and Asia. 

The S&P 500 index dropped more than 2% and the technology-focused Nasdaq Composite declined more than 3% after a private survey tracking manufacturing activities showed a contraction for the fifth month in a row in August. 

The fears of an economic slowdown gripped market sentiment, and only five weeks ago world markets plunged more than 5% after the U.S. labor markets signaled a possible slowdown. 

However, those fears were set aside over the next three weeks after a string of positive economic data suggested that the economy continues to expand amid weakening inflation. 

Investors shifted their attention to the release of the nonfarm payroll report on Friday, and if the U.S. economy adds less than 125,000 net new jobs in August, market indexes may face additional selling pressure. 

Closer to home, a private survey tracking service sector activity growth moderated in August. 

The Caixin General Service Purchasing Managers' Index slowed to 51.6 in August from 52.1 in July, indicating a slowdown in growth in the sector's activities. 

New order growth eased and input costs increased at the fastest pace in a year; however, the final price for services fell for the first time in seven months amid intense competition and discounts. 

The service sector expanded for the 20th consecutive month, according to the report released by S&P Global. 

 

China Stock Movers 

The Hang Seng index declined 1.1% to 17,462.25 and the CSI 300 index dropped 0.4% to 3,260.34, tracking losses in Asia and Europe as investors switched to risk-on mode. 

Oil exploration companies fell sharply in Hong Kong and Shanghai after crude oil prices plunged as much as 5% to $69.55 a barrel. 

CNOOC Ltd. decreased 5.5% to HK $20.05 and Petro China declined 5.9% to HK $6.52. 

Tech stocks traded down, following sharp losses in artificial intelligence-linked stocks in overnight trading in New York, and semiconductor stocks were among the leading decliners. 

Tencent Holdings declined 1.2% to $373.60, Meituan edged up 0.5% to HK $119.50, Alibaba Group inched higher 0.5% to HK $80.30, Baidu dropped 1% to HK $80.50, and JD.com rose 1.1% to HK $106.10. 

SMIC fell 2% to HK $16.04, Sense Time Group fell 2.6% to HK $1.11, and Wingtech Technology decreased 0.4% to 24,90 yuan. 

Hong Kong Exchanges and Clearing Limited declined 1.1% to HK $230.20 and approached its five-year low.