Heng Seng Indexes pressured by the mainland cities’ lockdown as European markets remains stable after French election on sunday
The Hong Kong stock plummeted 663.71 points, or 3.03% today from its previous close, falling to the lowest level in the past three weeks as concerns over the lockdown of Shanghai and other main cities in China under a new round of pandemic gloomed over the country’s economic growth.
Heng Seng Indexes opened at 21,688 in the morning and hit the lowest point of 21,132 in the mid day.
Among the worst performers of the index, Country Garden Services Holdings Company(06098) tumbled 9.10% to HK$ 36.45. Alibaba (09988) slipped 5.11% to HK$98.5 and Xiaomi Cooperation (01810) lost 6.36% to HK$ 12.36.
Concerning the worsening pandemic outbreak in mainland cities, the forecast for economic performance in April is pessimistic. “Comparing the country’s March’s Purchasing Managers' Index with other months, the figure still falls in the relatively bad range,” said Steven Wong, the portfolio manager from the Harris Fraser group.
The latest Caixin China Services Purchasing Managers' Index, announced a few days ago, fell to 42 in March from 50.2 in February. The 50-point mark separates growth from contraction on a monthly basis.
Wong indicated that the main concern is how long will it take for those cities to handle the outbreak under the zero-covid policy that was insisted on by the government. The effect on the consumer and the manufacturing related sectors will be the first to suffer enormously during the city-wide lockdowns.
Shanghai, China’s economic center with 23million people, entered a 2-week lockdown as the city’s daily COVID cases surged to 26,090 on April 10. Consumption and manufacturing suffered a lot from the country’s zero-covid policy.
“ We will see much more impact on the mainland real estate sector gradually, since it is the main contributing factor of China’s GDP, the government might need to loosen its monetary policies in order to stimulate the economy,” said Wong.
Shanghai Stock Exchange dropped 2.61% to 3,167.13 today, while the SZSE composite index decreased 3.33%, down 69.32 points.
The U.S. CPI index will be released on Tuesday, which is expected to reach its peak at 8.5% according to UBS’s prediction. The Federal reverse is yet to decide whether to stricten the current monetary plan.
For European markets, by 6:30 PM (1030 GMT), the DAX in Germany traded 0.4% lower, the U.K.’s FTSE 100 dropped 0.15%, while CAC 40 in France rose 0.72%.
On Sunday, incumbent President Emmanuel Macron won a majority of votes in the first round of voting in France’s presidential election, beating the National Rally representative candidate Marine Le Pen, along with the popular far right candidate Éric Zemmour, and far left candidate Jean Luc Mélenchon.
A repeat of the previous French elections in 2017 is set to take place once again with Macron garnering 27.1% of the votes in the first round, and Le Pen winning 23.2%. Le Pen holds a more anti-European Union idea. The final result will come out on April 24.
《The Young Reporter》
The Young Reporter (TYR) started as a newspaper in 1969. Today, it is published across multiple media platforms and updated constantly to bring the latest news and analyses to its readers.
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