Blue chips battling big slumpBusiness | Bloomberg 23 Aug 2019
Hong Kong stocks are poised for their worst quarter since 2015 and corporate earnings are unlikely to save them, analysts said.
Analysts forecast an average of 19.2 percent slump in operating income of blue-chip stocks in 2019, which would be the biggest contraction for Hang Seng Index companies since the global financial crisis, data compiled by Bloomberg show.
The Hang Seng Index fell 221 points to 26,048 yesterday with a market turnover of HK$78.54 billion.
Meanwhile, the yuan dropped to its weakest since March 2008 as uncertainty over the trade dispute with the United States persisted. The onshore yuan was down 0.41 percent to 7.0927 per dollar yesterday. The currency has tumbled 0.9 percent over the past six sessions, the worst performance in Asia.
Elsewhere, US Federal Reserve officials viewed their interest-rate cut last month as insurance against too-low inflation and the risk of a deeper slump in business investment stemming from uncertainty over President Donald Trump's trade war.
"Members who voted for the policy action sought to better position the overall stance of policy to help counter the effects on the outlook of weak global growth and trade policy uncertainty, insure against any further downside risks from those sources, and promote a faster return of inflation" to the 2 percent target, according to minutes of the July 30-31 Federal Open Market Committee meeting.