Hell In Hong Kong And A Mainland Maiming

As expected, Monday’s bloodbath on the Nasdaq spilled over into Asia, with mainland and Hong Kong shares suffering the most.

The Hang Seng came into November riding the worst monthly losing streak since 1982 and while the index still looks set to snap that run in November, days like Tuesday don’t help.

Hong Kong shares fell more than 2% on the day, the 15th session this year of >2% losses. The following chart shows just how different 2018 has been versus 2017 in that regard.


There were just two days in all of 2017 when Hong Kong shares fell by 2% or more. Oh, what a difference a year makes. Here’s the monthly chart for the index that shows you how rough a stretch it’s been:


And here’s the visual which shows you that the six month streak of losses the Hang Seng is trying to snap is the worst run since 1982:


Tencent was crushed on Tuesday and honestly, that story is descending into farce. The shares are down 18 of the last 24 weeks and are off something like 42% from the highs.


Meanwhile, on the mainland, this was the worst day for the Shanghai Composite since October 29. On the bright side, realized volatility has calmed down after an October that saw mainland Chinese shares gyrate more wildly than, for instance, Turkish bank stocks.


In case it isn’t clear enough, the last thing Asian shares need amid the trade jitters is for Tech to rollover on Wall Street.

The irony is, all of this is inextricably bound up with itself, as trade tensions spark fears of tit-for-tat retaliation that ensnares Tech companies, imperils supply chains and dents demand for consumer electronics.

Thanks protectionism!




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