Hong Kong Stocks fall on bubble risk

March 02,2021

Hong Kong stock market finished session lower on Tuesday, 02 March 2021, as China's financial markets regulator expressed concerns about asset bubbles. At closing bell, the benchmark Hang Seng Index dropped 1.21%, or 356.71 points, to 29,095.86. The Hang Seng China Enterprises Index shed 0.81%, or 92.33 points, to 11,361.35.

Guo Shuqing, head of the China Banking and Insurance Regulatory Commission, said he's “very worried” about risks emerging from bubbles in global financial markets and the nation's property sector, sparking fresh concerns about further tightening in the world's second-biggest economy.

Global markets are starting to see side effects of fiscal and monetary policy steps in response to the COVID-19 pandemic, said Guo on Tuesday, adding that China was studying measures to manage capital inflows.

Bubbles in U.S. and European markets could burst because their rallies are heading in the opposite direction of their underlying economies and will have to face corrections “sooner or later,” Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission and Party secretary of the central bank said at a briefing in Beijing on Tuesday.

Traders will also keep a close watch on China's annual legislative meeting, which will start on Friday and offer a clue on the growth targets and major policy tones this year.

Chinese oil producers slumped before an OPEC meeting this week, at which major oil-producing nations are expected to announce to boost production of the fuel. CNOOC lost 3.4% to HK$8.84 and PetroChina retreated 3.2% to HK$2.72.

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