SHANGHAI: Hong Kong shares fell to a three-month trough on Wednesday while mainland China stocks touched two-week lows, weighed down by concerns about a slowdown in the world’s second largest economy.
** By the midday break, the benchmark Shanghai Composite index had dropped 1.4%, while the blue-chip CSI 300 index was down 1.2%. Both indexes hit their lowest intraday levels since Aug. 10.
** In Hong Kong, the benchmark Hang Seng Index fell 1.33%, touching its lowest since May 10.
** Analysts attributed the weakness in the stock market to continued worries over the health of the Chinese economy. “A raft of recently announced policy support has not put an end to the struggles of China’s stock market,” Capital Economics said in a note this week.
** “We think that it will continue to slide, given that the economy faces multiple challenges, including from its property sector.”
** Losses were led by developers, with an index tracking major Chinese developers listed in Hong Kong down 3.77% in morning deals.
** Investment banks, including Nomura, said recent supportive measures to rescue the ailing property sector seemed to be too little and too late.
** “Beijing may need to consider a more comprehensive solution in its effort to resolve the property market predicament,” said Ting Lu, chief China economist at Nomura.
** “However, there is a limited likelihood that such a solution will be reached before end-2022.”
** EV makers were among the top losers on Wednesday, with Xpeng down 12.72% after reporting a bigger-than-expected quarterly loss.
** Sharp losses in Xpeng dragged other EV makers lower, with Hong Kong shares of rivals NIO Inc, Li Auto, BYD Co and Geely Automobile all down about 5% losses.
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