(Bloomberg) -- Hostage to everything from the U.S.-China trade dispute, a global tech sell-off and interest rate hikes, this has been one of the toughest years for Hong Kong stocks.
The benchmark Hang Seng Index ended the year down 14 percent, the worst since 2011, with technology shares and trade-war proxy WH Group Ltd. among the most sold. Heavyweight Tencent Holdings Ltd. posted its steepest annual loss on record, while drugmakers also joined the worst-performer list following a recent sell-off.
Hong Kong shares traded for half the day on Monday as 2018 came to a close. The Hang Seng climbed 1.3 percent. WH Group was among top performers after U.S. President Donald Trump touted “big progress” in trade talks with his Chinese counterpart Xi Jinping.
The liquid Hong Kong stock market, which has many Chinese listings, is vulnerable to shifts in sentiment. Concerns over slowing economic growth in China -- the latest sign being the weakest manufacturing purchasing managers' index since early 2016 -- coupled with an increase in borrowing costs by the Federal Reserve, have dragged down every sector on the broader Hang Seng Composite gauge this year apart from utilities. Hong Kong imports its monetary policy from the U.S. due to a currency peg.
All The Blows That Wiped $5 Trillion From Asia Stocks This Year
The local dollar has slipped 0.24 percent against the dollar this year, trading at the weak end of its permitted band much for several months as the interest-rate spread between the U.S. made it lucrative to short the currency. Hong Kong's de facto central bank intervened repeatedly since April to defend the peg.
To contact the reporter on this story: Kana Nishizawa in Hong Kong at knishizawa5@bloomberg.net
To contact the editors responsible for this story: Richard Frost at rfrost4@bloomberg.net, Will Davies, Kana Nishizawa
©2019 Bloomberg L.P.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
