Hong Kong stocks plunged, entering bear territory after the largest weekly loss in 5 months, attributed to China's property market turmoil.
Hong Kong stocks logged the biggest weekly loss in five months and closed in bear territory in the Friday session as uncertainty in China’s property market keeps weighing down the market.
A bear market is a prolonged downturn in prices that sees a broad market index drop at least 20% from its most recent peak.
Other major Asian markets traded lower. JPMorgan on Tuesday raised its emerging markets corporate high-yield default forecast primarily due to rising contagion fears.
The Hang Seng Index is set for its fourth annual decline in a row and signs of a reversal remain absent as the Fed has not turned dovish as expected so far this year.
Real estate stocks account for a larger share of H-share than of A-shares, which makes the former more susceptible to potential widening debt defaults.
Both Alibaba and Tencent earnings crushed analyst expectations in the second quarter, but investors ignored the strong results partly due to global tech stocks losing traction in August in general.
The index’s dip below a key short-term support around 19,000 this week exposes the key medium-term support of 18,220 and another leg lower now seems very likely.
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