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Greek debt crisis pulls HK stocks down 2.8%
Source: Bloomberg News |
September 20, 2011, Tuesday
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Print Edition
Print Edition
HONG Kong stocks dragged the Hang Seng Index to its lowest close in two years as concerns mounted that Greece's sovereign-debt crisis may be coming to a head, threatening to halt a global economic recovery.
HSBC Holdings Plc, Europe's largest bank by market value, slid 2.6 percent. Esprit Holdings Ltd, the clothier that gets most of its revenue from Europe, tumbled 20 percent, the most since 1997, amid analyst downgrades after the company reported last week that full-year profit plunged 98 percent. Cnooc Ltd, China's biggest offshore oil producer by market value, fell 4 percent after crude prices dropped.
"The Greek situation could be coming to a head," said Khiem Do, the Hong Kong-based head of multi asset strategy at Baring Asset Management, which oversees about US$10 billion. "Some hair cut might be needed for Greece if it doesn't receive additional funding. That could create a domino effect in countries like Spain, Italy and Portugal. That's what the market is fearing."
The index dropped 2.8 percent to 18,917.95 at the close, the lowest since July 2009. The gauge extended last week's 2.1 percent decline as international monitors start to assess whether Greece can meet the conditions of rescue loans to avoid a default. Greek Prime Minister George Papandreou canceled a US visit that was to begin on Sunday, saying he needed to remain in the country for a "critical" seven days.
All but four stocks declined in the 46-member Hang Seng Index. The Hang Seng China Enterprises Index of Chinese companies listed in Hong Kong sank 3.7 percent to 9,866.97.
Finance chiefs from the euro region said last week that the 18-month debt crisis leaves no room for tax cuts or extra spending to spur an economy on the brink of stagnation.
HSBC Holdings Plc, Europe's largest bank by market value, slid 2.6 percent. Esprit Holdings Ltd, the clothier that gets most of its revenue from Europe, tumbled 20 percent, the most since 1997, amid analyst downgrades after the company reported last week that full-year profit plunged 98 percent. Cnooc Ltd, China's biggest offshore oil producer by market value, fell 4 percent after crude prices dropped.
"The Greek situation could be coming to a head," said Khiem Do, the Hong Kong-based head of multi asset strategy at Baring Asset Management, which oversees about US$10 billion. "Some hair cut might be needed for Greece if it doesn't receive additional funding. That could create a domino effect in countries like Spain, Italy and Portugal. That's what the market is fearing."
The index dropped 2.8 percent to 18,917.95 at the close, the lowest since July 2009. The gauge extended last week's 2.1 percent decline as international monitors start to assess whether Greece can meet the conditions of rescue loans to avoid a default. Greek Prime Minister George Papandreou canceled a US visit that was to begin on Sunday, saying he needed to remain in the country for a "critical" seven days.
All but four stocks declined in the 46-member Hang Seng Index. The Hang Seng China Enterprises Index of Chinese companies listed in Hong Kong sank 3.7 percent to 9,866.97.
Finance chiefs from the euro region said last week that the 18-month debt crisis leaves no room for tax cuts or extra spending to spur an economy on the brink of stagnation.
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