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Hong Kong stocks ended Thursday lower, with investors’ risk appetites subdued by a possible Greek default and increasing volatility in the mainland’s equity market.
But the Hong Kong exchange seemed to shrug off the midday veto by the city’s legislature of a China-vetted electoral reform package, and the US Federal Reserve’s latest statement that the US economy is likely strong enough to handle a rate hike this year. [
The Hang Seng index fell 0.2 per cent to 26,694.66, while the China Enterprises Index lost 1.1 per cent to 13,263.37 points.
Alex Kwok, strategist at China Investment Securities (HK), said that both the veto, and an anticipated US rate increase, have been “fully priced in’’, while investors are more concerned about the Greek debt crisis, and a sharp correction in Chinese stocks.
“The veto had been fully expected. Over the long term, it could harm Hong Kong’s economy, but I don’t see an immediate impact,’’ Kwok said.
He added that the impact from a US rate hike could also be limited, as the tightening progress will likely be gradual.
“The biggest concern now is the Greek debt crisis. Repercussion of a possible default would hit the Hong Kong market.’’
The market was also overshadowed by an increasingly volatile China market. On Thursday, mainland stocks slumped over 3 per cent amid a wave of new IPOs.
Most Hong Kong-listed financial shares fell, with Chinese lenders taking the lead.
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