The plunge on Wall Street led to a steep decline in Hong Kong in some of the heaviest trading of the year. For now, investors show precious little interest in buying.
Encouraging news from China these days does not necessarily mean gains for China stocks. Take Thursday, for example. China announced the July exports grew at a faster-than-expected pace of 20.4% year-on-year. And the Shanghai...
Hong Kong stocks opened sharply higher following the announcement Friday by U.S. Federal Reserve Board chairman Bernanke that the Fed might launch new measures in September to stimulate the U.S. economy.
China might see a technical rebound after a 20% swoon since early August. But there won't be a sustained recovery until the overhang of possible Greek default is eliminated.
The growing threat of default by Greece on its debt is the big factor driving China stocks sharply lower (along with other stocks around the world). Hong Kong's Hang Seng Index fell 3.4% Tuesday and has plummeted 7.6% in the last two days.
A default by Greece looms so large, it's almost easy to forget that there are China factors at work also adding to selling pressure.
Encouraging news about higher U.S. consumer spending and a Greek bank merger pushed Hong Kong higher in heavier trading. In addition, completion of Bank of America's sale of China Construction Bank removed uncertainty from the market.
News the U.S. Federal Reserve Board is considering further measures to boost the sagging U.S. economy helped Hong Kong sustain its month-ending rally. But Hong Kong blue chips still lost 8.5% in August.
Chinese stocks traded lower, ending the week's nice run for investors. Profit-taking emerged when the Hang Seng approached the formidable 21,000 resistance level.
Hong Kong and Chinese blue chips continued this weeks' surge Thursday morning but fell back in the afternoon after approaching strong technical resistance.
Action by major international central banks to provide liquidity to struggling European banks pushed Chinese blue chips higher but gains narrowed after the Hang Seng Index hit strong resistance.