Headline shares of the Hong Kong market were higher on Tuesday, 06 November 2018, as investors took a breather at the end of a broadly positive week after Fed meeting outcome reinforced views that a rate hike is coming in December and this tempered equities. At closing bell, the Hang Seng Index dropped 625.80 points or 2.39% to 25,601.92. The Hang Seng China Enterprises Index decreased by 272.13 points or 2.54% to 10,431.46. The sub-index of the Hang Seng tracking the Commerce & Industry sector slipped 3.1%, financial sector declined 2%, properties sector shed 2.3%, and Utilities sector sank 1.1%.
Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, said on Thursday that banks must allocate at least a third of their new loans to private companies, and they should not simply withdraw loans from companies facing difficulties in repayment. The market is worried that banks' non-performing loan ratios will go up if they need to lend more to businesses that are facing difficulties.
Investors have been worried that the launch of a new board for tech companies this week, announced by Chinese President Xi Jinping on Monday, will disrupt the valuation structure of the market. These concerns mounted after Fang Xinghai, deputy head of the securities regulator, had said on Wednesday the regulator would quickly implement Xi's plan for a new board.
Forty-nine blue chips, among the 50, fell, and only WH Group (00288) that was unchanged at HK$6.1. Tencent (00700) dipped 4.9% to HK$279.2 after CICC Research chopped its target price to HK$365 from HK$437. HSBC (00005) dipped 1.9% to HK$64.65. HKEX (00388) slipped 2.1% to HK$222.2. China Mobile (00941) retreated 2.6% to HK$72.9. AIA (01299) shed 1.1% to HK$62.65. Ping An (02318) sank 2% to HK$77.15.
Chinese banks were lower after both Shanghai and Shenzhen equity markets declined. CM Bank (03968) fell 5.5% to HK$31.75. BOC (03988) shed 2.6% to HK$3.35. ABC (01288) slid 3.3% to HK$3.5. ICBC (01398) declined 2.7% to HK$5.34.
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