Trading performance yesterday was lacklustre as a trio of bad news hit investor confidence with a rapid intensity. Pessimism permeated from stock markets to currencies as the HK Dollar weakened against its continental rivals. Despite recent pushes to improve its strength against local and international rivals, stimulus programmes have proven ineffective.
US Sanctions have also hit the Hang Seng index, with Russian Aluminum producer, Rusal, feeling the pinch of restrictions. Overall, the Hang Seng has had a rough day so far; receding from 30,849 to 30,261 by 4pm, a fall of 1.6%.
Hong Kong going through Bearish day
Australia ASX – 5,933.00 (up 0.14%) Shanghai Composite Index – 3,110.65 (Down 1.53%) Hang Seng – 30,315.69 (Down 1.60%) Mumbai Sensex – 34,305.43 (Up 0.33%) Nikkei 225 – 21,835.53 (Up 0.36%) Taiwan TSEC 50 – 10,954.55 (Down 0.10%)
The Financial Times reported that anticipation over the decisions of the Central Bank has caused pessimism over the HK Dollar. It continues to trade at its usual 7.85 mark, despite a drive to push upwards and take the fight to its rivals. According to Bloomberg, a $1.6bn project to boost the HK$’s power have not changed matters.
It continues to trail behind its American counterpart due to an over-abundance of liquidity. Paul Chan, Hong Kong’s financial secretary, has stated that investors may need to accept increased borrowing costs.
“[Investors] have to consider the possibility of a rise in the borrowing costs, and the impacts of higher interest rates on asset prices and their investments.”
Sanctions and Syria hound the Hang Seng
The Russian-based Aluminium manufacturer, Rusal, has been impacted by recent sanctions imposed upon the Russian Federation. Currently, the company has seen its market value fall by over 30%, driving up Aluminium prices globally, according to Bloomberg.
Meanwhile, petroleum and oil stocks have been some of the worst hit on the Hang Seng. With Titan Petroleum values slipping by 16% currently, as values peaked and troughed with the Syrian Conflict.