Hong Kong shares hit lowest level since 2009

Hong Kong – Shares in Hong Kong fell to their lowest level since the global financial crisis after an important speech by the mayor on Wednesday. The underlying Hang Seng index fell more than 3% to its lowest level since May 2009 before rebounding slightly.

Investors are also worried about the threat of a global economic downturn as central banks around the world are raising interest rates to cope with rising prices.

In his first political address, Hong Kong chief executive John Lee announced security measures and plans to bring more foreign talent to the territory. However, he did not elaborate on the economic goals of the city, which has lost ground to rival Asian financial centers such as Singapore.

Hong Kong’s economy is currently in a technical recession after two consecutive three-month contractions this year. Until recently, the city had some of the toughest coronavirus regulations in the world as it followed China’s zero Covid policy.

Traders were also concerned about the Hong Kong government’s “unprecedented silence on key economic indicators,” said Kelvin Tay, regional chief investment officer at UBS Global Wealth Management. However, Mr. Tai added that investors were most concerned about “[China’s] economic outlook and the rise in Covid cases in the midst of the party congress in Beijing.”

More than 2,000 delegates gathered this week in Beijing to elect leaders and discuss key policies at the Communist Party Congress.

President Xi Jinping is expected to be confirmed for a historic third term as head of the party. Other stock markets in the Asia-Pacific region also fell on Thursday, with the underlying equity indices in Japan, South Korea and Australia losing ground.

Meanwhile, the Japanese yen weakened to a fresh 32-year low of over 150 per US dollar. This sparked new rumors that the Japanese authorities will try to support the currency for the second time in just a few weeks.