Hong Kong’s Hang Seng index tumbled by more than 2% today as Asian stocks got smacked by China’s gloomy economic outlook following weak growth data.
The Hang Seng was forced to close on Monday - when the China GDP data was released - due to the arrival of Typhoon Talim, which may be contributing to the drop.
Most major Chinese conglomerates including Tencent, Alibaba, JD.com and the Industrial and Commercial Bank of China opt to list in Hong Kong, making it a proxy for investor sentiment in the Land of the Dragon.
In the second quarter of this year, China's economy saw growth of 6.3% compared to the same period last year, but this fell well short of the 7.3% forecast.
Draconian Covid lockdowns caused considerable pain for the Chinese economy, for which Hang Seng is suffering the after-effects.
But as a cornerstone of the global economy, fears of a major Chinese downturn are affecting markets outside of Asia too.
Since China is a major buyer of luxury goods, Paris’ CAC 40 index, which is heavily weighted to luxury stocks including Carter-owner Richemont, LVMH and Hermes, was rattled by yesterday’s frightful GDP figures.
Meanwhile, with China the biggest consumer of metals, a downturn in metal price caused a drag on London-listed mining groups.