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Hong Kong shares sink 4% after Lunar New Year break | Hong Kong shares sink 4% after Lunar New Year break |
(about 5 hours later) | |
Hong Kong shares joined the downward trend across Asia as trading resumed after the Lunar New Year break. | Hong Kong shares joined the downward trend across Asia as trading resumed after the Lunar New Year break. |
The Hang Seng was down a sharp 4.1% to 18,506.11 points. | |
Markets in China remained closed for a longer New Year break. Those markets that were open in the region over the past days had all seen hefty losses. | |
Japanese shares had tumbled in to bear territory after a two-day rout, but the Nikkei is closed on Thursday for a national holiday. | |
The biggest loser on the Hang Seng was HSBC, which fell 5.3%, while Tencent, AIA and China Mobile all shed more than 4% in early trade. | |
US growth concerns | US growth concerns |
The continuing concern over the global economy and China's slowing growth was confirmed by US Federal Reserve chair Janet Yellen in a speech to Congress on Wednesday. | |
She warned that financial conditions in the US had recently become "less supportive of growth", while China's "unclear" currency policy was fuelling global stock market volatility. | |
"This uncertainty led to increased volatility in global financial markets and, against the background of persistent weakness abroad, exacerbated concerns about the outlook for global growth." | "This uncertainty led to increased volatility in global financial markets and, against the background of persistent weakness abroad, exacerbated concerns about the outlook for global growth." |
While she said she was confident, China's economy was not facing a "hard landing", Ms Yellen said the overall uncertainty created by the world's second-largest economy was behind some of the steep falls in global commodity prices, which in turn were creating stress for exporting nations. | |
Auto woes | Auto woes |
South Korean shares also resumed trade after the new year break and joined the regional downward trend. | |
Seoul's Kospi fell sharply by 2.9% to close at 1,861.54 points, after retreating as much as 3.1%, its biggest percentage loss since May 2012. | |
Car makers were among the worst hit as fresh data showed that vehicle exports dropped by almost 20% in January, because of falling demand in emerging markets. | |
Hyundai, Kia and Ssangyong all lost around 2%. | |
Australia beats trend | Australia beats trend |
Australian shares, though, managed to edge higher on Thursday, providing some relief after two days of losses. | |
The ASX/200 closed 1% higher at 4,821.10 points after losing more than 4% since the beginning of the month. | |
Before the market opened, the Virgin Australia airline reported a swing back to half-yearly profit after cutting costs and profiting from lower fuel prices. | |
"All fundamental business metrics are in place for the group to report a profit for the 2016 financial year," Virgin chief executive officer John Borghetti said in a statement. | |
The forecast of full-year profitability comes after two years of net losses. | The forecast of full-year profitability comes after two years of net losses. |
However, investors seem to have expected better results and remain cautious about the airline's prospects. | |
Virgin Australia shares fell by more than 6% throughout the day. |