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Friday, September 22, 2017, 17:30
HK shares post biggest loss in 1 month on S&P downgrade
By Reuters
Friday, September 22, 2017, 17:30 By Reuters

Hong Kong stocks posted their worst decline in a month on Friday, erasing much of the week’s gains, as investors trimmed positions following S&P’s downgrade of China’s sovereign credit rating and nuclear threats from the Democratic People's Republic of Korea (DPRK).

The US Federal Reserve’s plan to shrink its balance sheet and later raise interest rates has also dented sentiment.

The Hang Seng index dropped 0.8 percent, to 27,880.53 points, posting its biggest one-day percentage drop since Aug. 18. The Hong Kong China Enterprises Index lost 0.8 percent, to 11,109.00.

But both gauges were still up for the week, gaining 0.3 percent and 0.4 percent, respectively.

Confidence is weakened by S&P’s one-notch China downgrade to A+ from AA-. The downgrade prompted a similar action against Hong Kong’s sovereign credit rating.

While Chinese firms do not have significant borrowings from overseas, the downgrade presents a psychological setback for investors.

Market participants are also concerned about heightened tensions over DPRK’s military provocations.

Investors dumped resource shares for the second day on fears a stronger dollar could hit commodity prices.

An index tracking the sector fell as much as 2.6 percent before trimming some losses. 


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