Why it matters
- Hong Kong had to absorb a week of rising global bond yields in a single session.
- Mainland buyers, a big source of daily trading, are absent until Oct. 8.
- Hong Kong's currency peg to the U.S. dollar means local borrowing costs follow U.S. rates.
Hong Kong stocks fell sharply on Friday as the market reopened after the National Day holiday.
The Hang Seng Index closed down 2.99%, or 736 points, at 23,877, according to Trading Economics. The index had last closed at 24,613.27 on Sept. 30.
Who fell
The selling was broad. Insurer AIA dropped 5.5%, smartphone maker Xiaomi 4.4%, Hong Kong Exchanges and Clearing 3.2% and Tencent 2.4%, Trading Economics reported. HSBC and Alibaba were also among the decliners early in the session, The Standard reported.
Why now
Hong Kong was closed on Thursday while the rest of the world dealt with a jump in borrowing costs. The yield on the 10-year U.S. Treasury note touched 5.34%, its highest since 2002, and oil climbed above $100 a barrel.
Trading was also missing one of its biggest sources of demand. Stock Connect, the link that lets mainland Chinese investors trade Hong Kong shares, is suspended from Oct. 1 through Oct. 7 for China's Golden Week holiday and resumes Oct. 8, according to BBN Times.
Elsewhere in Asia, Japan's Nikkei 225 fell 0.94% to 68,309 after a strong Thursday, according to Trading Economics.
Sources
- Trading Economics, Hong Kong stock market
- Trading Economics, Japan stock market
- The Standard, Hang Seng slumps to open fourth quarter
- BBN Times, Hong Kong stock exchange closed for National Day
