Chinese stocks listed in Hong Kong were crushed in Thursday trading as investors took profit on a recent bull run amid simmering tensions on the Korean peninsula.
The sell-off came amid a flare up in tensions between the U.S. and North Korea. U.S. president Donald Trump had earlier this week threatened the wannabe nuclear-armed, pariah state with “fire and fury.” North Korea countered with threats to launch missiles into waters off the coast of Guam, a U.S. territory in the western Pacific Ocean.
Hong Kong’s Hang Seng Index, a measure of the city’s blue chips, fell by 1.6%. Investors have been looking for reasons to take some money off the table following a 25% rally in these stocks since New Year. KGI Securities’ Ben Kwong says the index had entered the “overbought region” based on its measure in the Relative Strength Index, a technical indicator which measures buying and selling momentum.
The biggest loser in the city today was commercial landlord Wharf (4.HK), which slumped more than 7%. The stock had rallied by more than 13% on Wednesday after unveiling a plan to spin-off its two biggest shopping malls in a separate listing.
Hong Kong Exchanges & Clearing (388.HK), which runs the city’s stock exchange, plunged more than 4%. HSBC (5.HK), the second-biggest component in the index, fell more than 2%. Tencent (700.HK), the web giant that’s rallied more than 70% in New Year, tumbled over 1.4%.
Tensions with North Korea meant it was gloomy day overall in Asian trading. South Korean and Taiwan stocks were down more than 1%, while India’s Sensex slipped 0.6%.
By Daniel Shane