HONG KONG: Hong Kong stocks are poised to enter a bear market as declines in mainland markets and the devaluation of the yuan erode support for the city’s shares.
The Hang Seng Index lost 1.3 percent to 22,871.43 as of 11:45 a.m. in Hong Kong, paring earlier declines. The measure earlier fell as much as 2 percent, bringing its decline from a seven-year high on April 28 to 20 percent. The Hang Seng China Enterprises Index of mainland equities listed in the city, which entered a bear market last month, fell 1.8 percent.
Shares in the former British colony have been buffeted by a rout in China that destroyed about $4 trillion in market value. The Shanghai Composite Index fell by almost a third from its peak in mid-June, prompting the government to step in with unprecedented measures to support the market.
“People are scared,” said Rahul Chadha, co-chief investment officer at Mirae Asset Global Investments in Hong Kong. “It’s the fear factor.”
Galaxy Entertainment Group Ltd., Li & Fung Ltd. and Cathay Pacific Airways Ltd. retreated more than 3.1 percent, leading losses on the benchmark gauge on Thursday, while Lenovo Group Ltd. and China Unicom Hong Kong Ltd. posted the steepest losses during the slide since April.
