The Hang Seng tumbled on the last day of the month, falling 2% as traders appeared reluctant to hold risk over the weekend following Donald Trump’s signing of the Hong Kong bill and as the fate of the trade negotiations hangs in the balance.
Some market participants cited a plunge in healthcare shares on rumors tied to possible drug procurement by Beijing as the proximate cause of the jitters.
Friday’s loss meant Hong Kong equities fell 2% in November (the Hang Seng’s 50th anniversary month), which began with local shares riding high despite the city’s economic woes and heightened violence.
The Hang Seng China Enterprises index, meanwhile, fell 2.5% in one of its worst sessions of the year.
Friday saw the third-largest tumble of 2019 for Hong Kong healthcare shares, which dipped nearly 4% on the session. On the mainland, drugmakers fell almost 3% on price cuts.
Volume on the Hang Seng was some 40% higher than the 30-day average.
“There’s no obvious trigger”, a Hong Kong-based strategist at First Shanghai Securities told Bloomberg.
Frankly, it’s a small miracle local shares made it out of November with a loss that was only as large as Friday’s decline. Considering everything that happened (and the potential for US legislation and local elections to spark confrontation with Beijing even as both events marked big wins for the protesters), it could have easily been a nauseating swoon for a gauge that started the month in overbought territory.