Hang Seng Index slumps nearly 500 points in early trading on Thursday, insurers sink

The Hang Seng Index plunged nearly 500 points in the early morning trading session on Thursday, dragged by insurance and financial shares.

The benchmark Hang Seng Index fell by 493 points, or 1.9 percent to 25,422 points. 

AIA (1299) shares slid 8.2 percent, Prudential (2378) fell more than 5 percent, and Hong Kong-based insurer FWD Group (1828) was down 4.5 percent.

Beijing and Hangzhou authorities have started to apply personal income tax rates of 20 percent on returns from Hong Kong insurance policies, including dividend payouts and interest earned on prepaid premiums, Caixin reported on Wednesday.

The move was seen by analysts as a potential sharpening of China's increased scrutiny of offshore investments.

Chinese insurers Ping An Insurance (2318) and China Life Insurance (2628) were down more than 1 percent as both firms have a sizable offshore business with Hong Kong assets.

HSBC (0005) fell 2.2 percent and Standard Chartered (2888) was down 1 percent. Both have large insurance units.

The Hang Seng Tech Index decreased by 1.7 percent to around 4,849 points.

Staff reporter and Reuters
 

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