HomeTrading NewsHong Kong’s Hang Seng index drops to lowest close since February 2016; oil prices fall around 6%

Hong Kong’s Hang Seng index drops to lowest close since February 2016; oil prices fall around 6%

SINGAPORE — Shares in China lagged among Asia-Pacific markets on Tuesday, with the release of much better-than-expected Chinese economic data offering little respite.

Hong Kong’s Hang Seng index fell 6.35% in afternoon trade. That came after the benchmark index closed at its lowest since March 2016 on Monday.

Chinese tech stocks in Hong Kong were volatile in trading through the day. The Hang Seng Tech index tumbled more than 7% in morning trade, then briefly crossed into positive territory before erasing those gains, last plunging 7.46%.

As investors continued to assess the prospect of potential delistings from U.S. exchanges, dual-listed Chinese tech stocks in Hong Kong sat in deep negative territory: Alibaba was 11.5% lower while JD.com fell 9.94% and NetEase shed 7.93%.

Electric vehicle maker Nio, another dual-listed stock, fell 10.74% after its U.S. listed-shares plunged overnight on renewed delisting fears.

Sentiment on Chinese tech shares had taken a hit on Monday following a report that Tencent could face a record fine for violating anti-money laundering rules.

“Prospects of a hefty record fine on Tencent on money laundering regulatory breaches sent ripples of fears that Beijing’s opaque crackdown on the tech space may not quite all be in the rear-view mirror just yet,” Mizuho Bank’s Vishnu Varathan wrote in a Tuesday note.

In mainland China, the Shanghai composite slipped more than 4% while the Shenzhen component declined 3.852%.

Data released Tuesday showed Chinese industrial output rising 7.5% year-on-year in January and February as compared with a year earlier, higher than the 3.9% increase predicted by analysts in a Reuters poll.

Retail sales in China for the first two months of the year also beat expectations, gaining 6.7% in January and February as compared with expectations for a 3% rise by analysts in a Reuters poll.

However, China is currently facing its worst Covid-19 outbreak since the height of the pandemic in 2020, with major cities including Shenzhen rushing to limit business activity.

“It really is quite a difficult environment. I mean, markets do look incredibly oversold,” Steve Brice, chief investment officer at Standard Chartered Wealth Management, told CNBC’s “Street Signs Asia” on Tuesday. “Maybe when things get less bad markets will rebound quite strongly but it’s difficult to see through that … Often the best time to buy, but it just feels a little bit challenging today.”

Elsewhere, South Korea’s Kospi shed 0.91%. In Australia, the S&P/ASX 200 slipped 0.73%.

The Nikkei 225 in Japan climbed 0.15% while the Topix index advanced 0.79%.

MSCI’s broadest index of Asia-Pacific shares outside Japan declined 2.72%.

Oil prices drop more than 5%

Oil prices dropped in the afternoon of Asia trading hours on Tuesday, with international benchmark Brent crude futures slipping 5.73% to $100.77 per barrel. U.S. crude futures shed 5.63% to $97.21 per barrel. Those moves came after oil prices sharply declined overnight.

Oil prices have seen wild swings since Russia’s invasion of Ukraine, which raised fears of supply disruptions in an already tight market. Talks between Ukrainian and Russian officials are set to restart on Tuesday, following Monday’s negotiations between the two sides.

Overnight stateside, the S&P 500 shed 0.74% to 4,173.11 while the tech-heavy Nasdaq Composite dropped 2.04% to 12,581.22. The Dow Jones Industrial Average was little changed at 32,945.24.

U.S. Treasury yields were little changed Tuesday afternoon Asia time. The benchmark 10-year Treasury yield sat at 2.1402% after topping 2.14% on Monday. Yields move inversely to prices. The rise in Treasury yields comes amid expectations that the U.S. Federal Reserve is set to announce a interest rate hike on Wednesday.


The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 98.917 — still higher than levels below 98 seen last week.

The Japanese yen traded at 118.32 per dollar after weakening from below 118 against the greenback yesterday. The Australian dollar was at $0.718 following yesterday’s decline from above $0.728.

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