Hong Kong shares fall by 3%, its lowest recorded level since 2009

Hong Kong shares reportedly fell to their lowest level since the global financial crisis, following a major speech by the leader of the city on Wednesday.

Before reclaiming some ground, the benchmark Hang Seng index dropped by over 3% to its lowest point since May 2009.

Investors are also worried about the possibility of a global economic downturn if central banks across the world increase interest rates to combat increasing prices.

Yesterday, John Lee, Hong Kong's chief executive unveiled intentions to increase talent recruitment from abroad and security measures in his first policy speech. But he did not go into detail about the economic goals for the city, which has been overtaken by rival Asian financial hubs like Singapore.

The economy of Hong Kong is technically in a recession right now after contracting for two straight three-month periods this year.

Since it adopted China's zero-Covid standards, the city had among the strictest coronavirus regulations up until recently.

Dickie Wong, Kingston Securities' executive director, stated that Hang Seng has touched a 13-year low, and nothing is truly supporting the weak sentiment. There is a perception that tax breaks alone won't be sufficient to entice foreigners back to Hong Kong.

According to Kelvin Tay, UBS Global Wealth Management's regional chief investment officer, traders were particularly concerned regarding the Hong Kong government's silence on crucial economic indicators.

This week, almost 2,000 delegates met in Beijing for the Communist Party congress, where they would pick leaders and discuss important topics.

President Xi Jinping is anticipated to be approved for a historic third term as party leader on Sunday.

The benchmark share indices in South Korea, Australia, and Japan also witnessed declines on Thursday, along with other stock markets in the Asia-Pacific region.

In the meantime, the Japanese yen dropped to over 150 against the US dollar, a new 32-year low.

This led to more rumors that the Japanese government would try to support the yen for a second time in a short time.

Source credit: https://www.bbc.com/news/business-63324124