Hong Kong shares faced a wave of selling after the conclusion of the Chinese Communist Party’s national congress meeting over the weekend.
Index was down 5% by midday, bringing it below its lowest closing level since April 29, 2009. Shares also fell in mainland China. The benchmark CSI 300 was 1.7% lower and the Shanghai Composite Index was down around 0.9%.
Almost all shares in the Hang Seng Index were trading lower, but Chinese technology stocks were particularly hard hit. The shares of Alibaba Group Holding Ltd.,
were all down more than 9% by midday.
The selloff came after Chinese leader
cemented his control over the ruling Communist Party, appointing a number of loyalists to the party’s most powerful decision-making body and getting a convention-defying third term.
economists said “some investors may worry about checks and balances” after the increase in the concentration of power at the top of the Chinese Communist Party. But they also said the move could lead to a better execution of policy and “little political resistance against bolder reforms or changes to existing policy stances.”
China’s main stock indexes have outperformed the Hang Seng over the past few weeks. Local brokers and fund managers said this is partly because stock-exchange officials in the country have made phone calls telling them not to increase volatility, as The Wall Street Journal previously reported.
China’s National Bureau of Statistics released delayed GDP data on Monday, showing the economy grew by 3.9% for the three months ended Sept. 30 compared with a year earlier. That was up from the 0.4% growth recorded in the second quarter, when severe lockdowns slowed business activity.
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