Hang Seng Index Declines Following Citibank's Move Away from Chinese Stocks

Hang Seng Index Hits 3-Week Low

The Hang Seng Index was down 1.7 per cent at 17,147.98 as of 10:10am local time, marking the largest single-day decline in five weeks and triggering a three-week low for the index. This downturn came amidst disappointing inflation data from the mainland economy that raised concerns over growth.

Major Stocks Decline

• Alibaba decreased 1 per cent to HK$79.
• JD.com suffered a 2.8 per cent drop to HK$101.40.
• Tencent weakened 0.9 per cent to HK$369.80.
• Longfor tumbled 3.7 per cent to HK$8.27.
• China Resources Land lost 3 per cent to HK$20.20.

Inflation and Economic Data

Recent economic indicators indicate severe deflation pressures. The consumer price index saw a mere 0.6 per cent increase, below forecasts, whereas the producer price index dropped 1.8 per cent, missing estimates entirely.

Wall Street's Take on Chinese Stocks

In line with< i>JPMorgan and Nomura, Citibank has decided to snub Chinese stocks due to soft earnings growth and declining consumption. They've revised the year-end target for the Hang Seng Index to 19,800, a 3 per cent reduction.

Impact on Asian Markets

• Japan's Nikkei 225 slipped 2.4 per cent.
• South Korea's Kospi declined 1.2 per cent.
• Australia's S&P/ASX 200 lost 0.8 per cent.

With additional economic data expected later this week, including forecasts for slowing exports, market sentiments remain bearish on Hong Kong stocks.