HSI Heads South On Mainland Tightening Concerns

Hong Kong and most regional shares finished in the red on Thursday as higher short-term borrowing costs on the mainland sparked concerns about policy tightening there.

The Hang Seng Index opened in negative territory and tumbled more than 500 points during trading. It later pared some of the losses to close down 193 points, or two-thirds of a percent, at 29,113.

Turnover was a hefty HK$239.8 billion.

The biggest loser on the index was Xiaomi. The mainland smartphone maker sank 4.8 percent after some users reported that they could not download Google mobile services using the Android-based operating system it developed, and UBS reiterating its warning about risks over a US investment ban on the stock.

But Ping An Insurance jumped 2.1 percent to become the best-performing blue-chip stock despite reporting its first annual drop in profit since 2008.

Alibaba ended up about half a percent after choppy trade, as investors eyed the details of its US$5 billion bond deal.

Across the border, a spike in short-term interest rates raised fears that Beijing would tighten its policies to rein in stock and property prices. The Shanghai Composite Index edged down 0.4 percent, while blue-chip CSI300 index shed 0.2 percent. The Shenzhen Composite index lost more than 1 percent.

Elsewhere in the region, Tokyo’s Nikkei 225 retreated about 1 percent. The Kospi in Seoul gave up 1.4 percent. Taiwan ended a three-day winning streak to close 0.4 percent lower. Sydney trimmed 0.9 percent and Singapore fell about the same amount.

In commodities, oil prices rallied thanks to a pledge by producers to stick with their output policy towards steady supply cuts.

In currencies, the greenback reached its highest levels in about two months, supported by rising US yields.