Hang Seng drops 3%, Asia's worst, after Beijing stimulus disappoints
Hong Kong's Hang Seng Index slid 3% after trading resumed following a holiday, making it Asia's worst performer for the day.
The drop came after a holiday break and was triggered by rising US Treasury yields and disappointment over China's latest economic stimulus, with big financial names like HSBC feeling the impact.
Thin liquidity in China amplifies selloff
China rolled out fresh measures to boost its economy, but investors aren't buying in just yet, especially with mainland markets closed for Golden Week.
As Homin Lee, senior macro strategist at Lombard Odier Singapore, put it, "While price swings are somewhat amplified by the lack of southbound flows and thin liquidity during China's Golden Week holidays, the distinct defensive tone in the morning session sends a fairly clear signal that investors are underwhelmed by Beijing's growth support measures announced at the start of the week," and "Hang Seng index universe also gets additional headwinds from the US rate cycle channeled through the HKD peg."
The Hang Seng Index slid as much as 3% on the day, reflecting pressure from surging US Treasury yields, disappointment over China's stimulus measures, thin liquidity during China's Golden Week holidays, and HKD-peg-related rate-cycle headwinds.