Hong Kong shares plunge on fears Xi Jinping will crack down on China’s businesses

0



Global stocks were mixed, while Hong Kong’s benchmark plunged 6.4% on Monday, as dismay over the lack of new policy initiatives from a Chinese Communist Party congress overshadowed a report that the second The economy grew at a faster pace in the last quarter.

The dollar rose to nearly 150 yen, a day after the Japanese central bank moved again to curb the yen’s slide.

Britain’s FTSE 100 fell 0.7% to 6,918.15 after the former Prime Minister Boris Johnson announced that he will not run to lead the Conservative Party. Former Treasury chief Rishi Sunak is now the favorite to replace Liz Truss. who resigned last week after his tax cut economic package caused turbulence in the financial markets.

France’s CAC 40 was up nearly 0.6% in early trading at 6,068.71. Germany’s DAX added 0.6% to 12,807.23. The Dow Industrial future fell 0.4% and the S&P 500 future fell 0.5%.

The Beijing report that the The Chinese economy gained momentum in the latest quarter it was better than expected and up from 0.4% in the previous quarter, but that was one of the slowest expansions in decades as the country struggled with repeated city lockdowns to combat virus outbreaks.

There were no new initiatives to boost the market from the Communist Party congress, where Xi Jinping, the most powerful leader in decades, gained a free hand in setting policy. The government appointed Standing Committee of seven members formed by Xi’s allies and abandoned supporters of free enterprise such as Premier Li Keqiang, the party’s No. 2 before the party congress once every five years.

Xi wants a bigger role for the Communist Party in business and technology development. That has prompted warnings. tighter control of employers that create jobs and wealth will depress growth that was already in decline in the long run.

The 6.4% drop in Hong Kong’s Hang Seng Index to 15,180.69 took it to its lowest level since 2006.

The Shanghai Composite Index lost 2.0% to 2,977.56.

Xi also gave no signs of plans to change the severe “zero-COVID” strategy that has hampered business and commerce. He indicated that there were no changes in the policies that strain relations with Washington and Asian neighbors.

Japan’s benchmark Nikkei 225 index rose 0.3% to finish at 26,974.90. Australia’s S&P/ASX 200 gained 1.5% to 6,779.40. South Korea’s Kospi gained 1.0% to 2,236.16.

Wall Street ended last week on a broad rally, with tech stocks, retail and health care companies driving much of the gains.

The S&P 500 rose 2.4%, posting a weekly gain of 4.7%, its biggest gain since June. The Dow rose 2.5% and the Nasdaq Composite added 2.3%. The Russell 2000 Index rose 2.2%.

Investors have focused on corporate profits as they search for clues about how inflation and rising interest rates are shaping global economies.

The Federal Reserve is expected to raise interest rates another three-quarters of a percentage point at its November meeting. That’s triple the size of the Fed’s usual move.

In currency trading, the US dollar rose to 149.28 Japanese yen from 147.65 yen. The Bank of Japan was reported to have stepped in on Friday to prop up the yen after the dollar rose above the 150 yen level. The dollar fell after the reported intervention, but recovered.

The euro cost 98.25 cents, compared to 98.62 cents.

The dollar has gained strength as the US Federal Reserve has raised interest rates to combat inflation. Their growing strength against the yen and other currencies has added to inflationary pressures in those countries by driving up import costs and debt payments.

In energy trading, benchmark US crude fell $1.32 to $83.73 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the international standard, fell to $1.29 at $92.21 a barrel.

Sign up for the characteristics of fortune email list so you don’t miss out on our biggest features, exclusive interviews and investigations.



Source link