HONG KONG: Hong Kong and mainland China markets suffered deepening losses as the morning session progressed on Tuesday, tracking weakness in US stocks after crude oil tumbled to a nearly seven-year low amid concerns that the major oil producing nations are unable to reach an agreement to curb a growing supply glut.
The Hang Seng Index was quoted at 21,833 around mid morning, down 1.7 per cent or 370 points from Monday’s close.
The Hang Seng China Enterprises Index that tracks mainland companies listed in Hong Kong fell by 1.44 per cent or 140.62 points to trade at 9,657.57.
Mainland China stocks were also downbeat, with the Shanghai Composite Index trading at 3,502.66, easing 1 per cent or 34.27 points, while the CSI300, which tracks large companies listed in Shanghai and Shenzhen, fell 0.83 per cent or 30.71 points to trade at 3,656.9.
The Shenzhen Composite Index fell 0.71 per cent to 2245.26, while the Nasdaq-style ChiNext traded at 2714.85, down 0.85 per cent.
Leading the declines among subindexes, insurance was down 2.1 per cent, oil and gas fell 1.6 per cent, and support services fell 1.3 per cent.
Shares of insurance giant Ping An were down 2.3 per cent, while China Mobile was off 1.6 per cent. The weaker oil price took its toll on energy producers. Offshore oil giant CNOOC’s shares tumbled 3.5 per cent and PetroChina’s were down 3.3 per cent.
The People’s Bank of China set the yuan reference point at 6.4078 per US dollar, or weaker by 93 basis points from Monday.
The offshore yuan was trading at 6.4081 per US dollar, down from its level Monday, and its weakest since August 26. The offshore yuan was at 6.4780 per US dollar, its weakest since September 7.
Analysts from ING commercial banking said that the PBOC is trying to restore convergence between the onshore and offshore markets to levels prior to the August 11 devaluation.
“At 0.94% the current offshore USD premium to onshore spot is the widest in three months,” ING analysts said in a note.
