Hong Kong stocks post biggest weekly loss in 4 months amid global tightening fears

July 7 (Reuters) – Hong Kong stocks followed most Asian
markets lower on Friday, and posted their biggest weekly loss in
four months, as growing concerns about policy tightening by the
world’s central banks weighed on global bourses.

Worries that China’s economic growth could slow in the
second half have also curbed risk appetite.

The Hang Seng, the Hong Kong benchmark that ranked among the
best-performing major indexes in the first half, dropped 0.5
percent to 25,340.85 points, and was down 1.6 percent for the
week. The China Enterprises Index lost 0.9 percent, to
10,251.83 points.

Yang Hai, an analyst at Kaiyuan Securities said tightening
by the Federal Reserve and the European Central Bank “would have
a negative impact on liquidity situations in Hong Kong”.

The market’s upward momentum already appears to be losing
steam, amid signs that the pace of Chinese money inflows – a
major source of strength – is slowing.

Net inflows from the mainland via “Connect” schemes slumped
by more than half in June, while monthly selling of Hong Kong
stocks through the cross-border links rose to a record this
year, according to the China Securities Journal, showing Chinese
investors are increasingly cautious.

Most sectors fell in Hong Kong, led by IT shares,
which dropped sharply after the tech-heavy Nasdaq fell 1 percent
overnight.
(Reporting by the Shanghai Newsroom; Editing by Jacqueline
Wong)

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