HONG KONG: Hong Kong stocks slumped the most in two months with Mr Donald Trump being elected US president. The yuan advanced. The Hang Seng Index declined 2.2 per cent, the most since Sept 12, to close at a three-month low. All but one of the 50 members dropped on turnover that was more than double the 30-day average for the time of day. PetroChina Co and China Petroleum & Chemical Corp led losses by energy producers as crude dropped, while Industrial & Commercial Bank of China slid more than 3 per cent. The Shanghai Composite Index pared losses, with gold producers rising as haven demand pushed the metal’s prices higher. Mr Trump pulled off a major electoral upset to become the 45th president of the United States, which could threaten Chinese trade. He has previously suggested imposing a 45 per cent tariff on imports from the Asian country. Hong Kong, as a global financial centre with a currency pegged to the greenback and a stock index increasingly weighted toward Chinese state-owned companies, is especially vulnerable.
“It’s very difficult to say what Trump will do, but certainly his stance is more hawkish,” said Mr Kevin Lai, chief economist for Asia excluding Japan at Daiwa Capital Markets in Hong Kong. “He will probably make a lot of noise over the next 12 months. When somebody comes into office, he or she will try to play tough as they wouldn’t want to be seen as weak. Beijing has to play catch up and adjust its policy.” The Hang Seng Index slid to 22,415.19. The Hang Seng China Enterprises Index of mainland equities traded in Hong Kong plunged 2.9 per cent. The Shanghai Composite fell 0.6 per cent. Mainland investors bought a net 4.8 billion yuan (S$986 million) of Hong Kong shares through a link with Shanghai, the biggest inflow since Sept 19. Foreign investors were net sellers of Shanghai stocks, offloading the most since July 2015. Mr Trump, 70, was projected to be the victor early Wednesday by the Associated Press and television networks after Wisconsin pushed him over the 270 Electoral College vote threshold needed to become president-elect. He will be sworn in on Jan 20. Speaking to supporters, Mr Trump said Mrs Clinton called him to concede. China hopes the new US government can work with it for steady and sound bilateral relations, Mr Lu Kang, a spokesman for China’s Ministry of Foreign Affairs, said at a briefing.
Futures on the S&P 500 plummeted more than 2 per cent, while Mexico’s peso — a barometer for investors’ perceptions of the American vote — sank to a record low before paring losses. Safe-haven demand pushed the yen and gold up by more than 1.7 per cent. US crude tumbled 1.2 per cent. Shandong Gold Mining Co rose 10 per cent, the most since July, in Shanghai and Zhongjin Gold Corp climbed 10 per cent as well. “Global markets are in risk-off mode, which is likely to continue,” said Mr Andy Ji, a Singapore-based currency strategist at Commonwealth Bank of Australia. “Asia and emerging markets are vulnerable, and are likely to face relatively big shocks should Trump win.”
