Consumer decline in US hits Hang Seng
Source: Bloomberg News |
August 4, 2011, Thursday
|
Print Edition
Print Edition
HONG Kong's Hang Seng Index posted its steepest decline in three weeks, as exporters fell after an unexpected decline in US consumer spending spurred concern that growth in the world's largest economy is faltering.
Li & Fung, the biggest supplier of toys and clothes to retailers, including Target and Wal-Mart, slumped 5 percent. Jiangxi Copper, China's largest producer of the metal, fell 2.6 percent after the price of copper dropped. Sun Hung Kai Properties, Hong Kong's premier developer by market value, dropped 1.7 percent after a report showed home sales in Hong Kong have plunged to the lowest level since April 2009.
Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, said: "Worries about debt in the US and Europe distracted investors from concerns about the slowdown in global growth. If European and US growth continues to weaken, that will have an impact on Asian exporters."
The Hang Seng Index sank 1.9 percent to 21,992.72 at the close, its biggest drop since July 12. All but one stock in the benchmark index of 46 companies fell.
The Hang Seng China Enterprises Index, which tracks so-called H-shares of Chinese mainland companies, declined 2.2 percent to 12,007.10.
Futures on the Standard & Poor's 500 Index gained 0.6 percent. In New York, the index retreated 2.6 percent, the most in a year, when consumer spending figures were published by the US Commerce Department.
They showed consumer purchases slid 0.2 percent in June, the first drop in almost two years.Incomes grew at the slowest pace since November and the savings rate climbed.
The Senate voted yesterday to ratify a US debt-limit compromise that will avert a default even as it defers decisions on the nation's finances to a bipartisan panel and may only modestly reduce deficits. The House approved the measure on Monday. This raises the national debt ceiling enough to fund the government until 2013.
Rating agency Moody's said the US may be downgraded for the first time on concern that fiscal discipline may ease, further debt--reduction measures will not be adopted and the economy may weaken. Moody's placed the US, rated Aaa since 1917, on negative outlook.
Li & Fung, the biggest supplier of toys and clothes to retailers, including Target and Wal-Mart, slumped 5 percent. Jiangxi Copper, China's largest producer of the metal, fell 2.6 percent after the price of copper dropped. Sun Hung Kai Properties, Hong Kong's premier developer by market value, dropped 1.7 percent after a report showed home sales in Hong Kong have plunged to the lowest level since April 2009.
Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, said: "Worries about debt in the US and Europe distracted investors from concerns about the slowdown in global growth. If European and US growth continues to weaken, that will have an impact on Asian exporters."
The Hang Seng Index sank 1.9 percent to 21,992.72 at the close, its biggest drop since July 12. All but one stock in the benchmark index of 46 companies fell.
The Hang Seng China Enterprises Index, which tracks so-called H-shares of Chinese mainland companies, declined 2.2 percent to 12,007.10.
Futures on the Standard & Poor's 500 Index gained 0.6 percent. In New York, the index retreated 2.6 percent, the most in a year, when consumer spending figures were published by the US Commerce Department.
They showed consumer purchases slid 0.2 percent in June, the first drop in almost two years.Incomes grew at the slowest pace since November and the savings rate climbed.
The Senate voted yesterday to ratify a US debt-limit compromise that will avert a default even as it defers decisions on the nation's finances to a bipartisan panel and may only modestly reduce deficits. The House approved the measure on Monday. This raises the national debt ceiling enough to fund the government until 2013.
Rating agency Moody's said the US may be downgraded for the first time on concern that fiscal discipline may ease, further debt--reduction measures will not be adopted and the economy may weaken. Moody's placed the US, rated Aaa since 1917, on negative outlook.
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