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Hang Seng index inches away from bear market

The Hang Seng index in Hong Kong lost near 1 per cent on Thursday to close at 26,974, its lowest level for more than a year, making it 19.4 per cent lower than recent high of 33,484 recored in January , just inches away from a technical bear market. The Hang Seng China Enterprises Index lost 0.6 per cent to close at 10,578.

Shares of technology firms, hotels and entertainment companies, semi-conductor chipmakers, and pharmaceutical companies led the losses.

The heavyweight blue-chip stock Tencent tumbled 3.1 per cent to close at HK$314,  the lowest level since August 2017. The stock has plunged over 30 per cent from the recent high, bringing its market capitalisation less than HK$3 trillion.

Weakness in emerging-market currencies has led to capital outflows from emerging markets and also a selloff of Hong Kong stocks, said Shao Zhiming, analyst at Credit Suisse Asia-Pacific.

Hong Kong stocks are expected to see more declines as risk aversion sweeps across the market , said Shao.

Considering uncertainties from escalating trade tensions between China and the US as well as a currency crisis in emerging markets, Hang Seng Index is expected to test the year-to-date low of 26,871 recorded last month, said Liang Zhenhui, strategist at Standard Chartered in Hong Kong.

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