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Hang Seng Index Struggles for Rebound Following Two-Day Rout

Shares in Asia-Pacific were mostly lower in Wednesday morning trade, with stocks in Hong Kong struggling to bounce back from a two-day rout. By Wednesday afternoon in Hong Kong, the Hang Seng index sat 0.24% lower. That followed a more than 8% decline over two days earlier this week triggered by regulatory fears over sectors such as technology and private education. Analysts at Bespoke Investment Group pointed out that there had only been one other period in 2011 when the Hang Seng declined more than 7.5% for two days. Since then, they wrote: “There hasn’t been a single two-day decline since the Financial Crisis that has exceeded the magnitude of the last two days.”

Chinese tech stocks in Hong Kong, among the hardest hit in the recent sell-off, were mixed. Shares of internet giant Tencent in Hong Kong dropped 3.73% while Alibaba nudged 0.72% lower and Meituan dipped 0.1%. Meanwhile, rose 1.32% and Kuaishou Technology jumped 2.11%.The Hang Seng Tech index sat below the flatline. Electric vehicle maker Xpeng’s Hong Kong-listed shares plummeted 12.63%, mirroring losses of a similar magnitude for its U.S.-listed stock overnight.

Stocks of firms in the private education space, another sector hit by regulatory scrutiny, bounced back after heavy losses earlier in the week: New Oriental Education & Technology Group gained 6.84% while Koolearn Technology jumped 9.42%. Mainland Chinese stocks continued slipping: The Shanghai composite fell 0.59% while the Shenzhen component declined 0.328%. South Korea’s Kospi declined 0.24%. The S&P/ASX 200 in Australia dipped 0.7%. Australia’s consumer price index rose 0.8% in the June 2021 quarter, according to data released Wednesday by the country’s Bureau of Statistics. In Japan, the Nikkei 225 dropped 1.42% while the Topix index slipped 0.94%.

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 92.448 following a recent drop from above 92.7. The Japanese yen traded at 109.80 per dollar, stronger than levels above 110.4 seen against the greenback earlier this week. The Australian dollar changed hands at $0.7359, above levels below $0.732 seen last week. Oil prices were higher in the afternoon of Asia trading hours, with international benchmark Brent crude futures up 0.51% to $74.86 per barrel. U.S. crude futures gained 0.63% to $72.10 per barrel.

Source: FXPro

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