The stock market in Hong Kong slid into the red in two sessions, slipping down 2.1 percent or 425 points. The city's Hang Seng Index at present a little below 19,700 points. Some more damage can be forthcoming.
China's state of economy
Investors, who were already worried concerning the economic health of China has now become more cautious. Minutes from the meeting which took place in the Federal Reserve showed that officials of the central bank feel that the US could go the same way in June. Such an event of greater American financial tightening will exert pressure on Hang Seng. All principal sectors dipped. Energy shares led the southbound data.
When it comes to Asian markets, the global forecast is soft. This is due to the persistent concerns regarding the outlook for the interest rates. Asian stock markets followed the lead of the US and European markets.
The Hang Seng finished lower due to losses from property stocks, mainland financials and oil. Among actives, HSBC went up north by 3.21 percent. Henderson Land dropped 1.13 percent and losses of Sun Hung Kai Properties was 0.98 percent. The list of other droppers includes Want Want China, Sinopec (China Petroleum and Chemical) was 2.53 percent and 0.78 percent respectively. The list of losers also includes PetroChina, China Construction Bank and China Life who dropped 1.70 percent, 0.66 percent and 1.08 percent respectively. There was a dip of 0.67 percent by Bank of China as well. Only Li & Fung went up by 0.47 percent.
Negative Wall Street
Wall Street showed negative signs as the stocks made recovery from their earlier weakness. They, however, could not move up from red on May 19. The important averages, with the losses, dipped to the lowest closing levels at a space of two months. There was a drop of 0.5 percent or 91.22 points of the Dow to 17,435.40 and the Nasdaq dipped 0.6 percent or 26.59 points to 4,712.53 S&P500 dipped 0.4 percent or 7.59 points to 2,040.04.
This early sell off mirrored the renewed concerns about interest rates outlook after the minutes of Wednesday's meeting of Federal Reserve regarding latest monetary policy. These minutes hinted that there is a possibility of a hike in the interest rates at the next meeting of the central bank scheduled to take place in June. A majority of the participants said that it will be okay to raise rates in June if the coming economic data is supportive of such moves.