Hong Kong Stocks Slump As Asian Markets Retreat

Hong Kong stocks fell on Tuesday morning, in line with a broad retreat across Asia as profit-takers stepped in following a recent rally, while investors are keeping tabs on developments in the China-US trade standoff.

The Hang Seng Index slipped just over 1 percent, to 26,921 by the break.

On the mainland, the Shanghai Composite Index fell 0.7 percent, to to 2,591, while the Shenzhen Composite Index walso shed 0.7 percent, 1,320.

Most other Asian markets edged down while the pound maintained gains on hopes Britain will avoid crashing out of the European Union.

Tokyo went into the break 0.1 percent lower.

Sydney also slipped 0.5 percent, Singapore shed 0.2 percent and Seoul was 0.4 percent lower while Wellington and Taipei were also well down.

On currency markets the pound edged up slightly against the US dollar, having bounced on Monday after British Prime Minister Theresa May said she would try to hammer out changes to her Brexit deal that was roundly rejected by MPs last week.

The British currency was trading at US$1.2893 and HK$10.10 on Tuesday morning.

The pound "has been helped by ongoing optimism that a hard Brexit will be avoided on 29th March", said Ray Attrill, strategist at National Australia Bank.

He pointed out that MPs from both sides of the aisle had proposed a bill pushing for a delay if an agreement cannot be agreed in parliament by February 26.

"There's a good chance this gets up. If so, it further flattens the tail risk of a hard Brexit on March 29, though note all 27 EU nations will need to agree to an extension, so it wouldn't eliminate the risk completely." (AFP)

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