The global selloff is really starting to accelerate now.
On Thursday morning we noted that the Hang Seng looked vulnerable, having fallen more than 1% amid a two-day slide.
Well that two-slide just turned into a three-day slide, because on Friday, Hong Kong shares had their worst day of the year (actually the worst day since November 9).
“The Chinese government is rubbing salt into the wounds of the Hang Seng by kicking off a probe into Tencent, Sina and Baidu for cyber law violations,” Bloomberg’s Kyoungwha Kim wrote overnight, adding that “Traders are rushing for the exit and trading volumes on the Hang Seng are more than 80% above their 30-day average.”
Here’s the Tencent headline:
- CHINA PROBES TENCENT, WEIBO, BAIDU ON CYBER LAW VIOLATIONS
And have a look at the shares:
Mainland investors dumped net CNY1.2b of Hong Kong stocks via the connects today. That’s the most vicious wave in 8 months.
As for when whether this is overdone, at least one fund manager Bloomberg describes as “large” (‘big league’) says the answer is definitively “no.”
“Call me back when the index is near 25,000,” he said.