The Hang Seng Index weakened again for the second consecutive day. The Hong Kong stock exchange closed down 2.2%, or 611.54 points, to 26,775.57 on Monday (February 2) its biggest daily decline since the index fell 2.4% on November 21. This means that this selling pressure is not just a slight correction, but has entered a more pronounced "risk-off" phase.
Compounding the decline, the decline was widespread across almost all sectors. Trade and industrial stocks led the decline, and the overall market looked "total red": out of 88 stocks, 75 fell, while only 11 rose. This usually indicates selling is not limited to a few issuers, but rather a broader unwinding of positions.
One of the biggest decliners came from large cap technology stocks. Alibaba Group Holding Ltd. was the biggest contributor to the decline after dropping 3.5%, also dragging down sentiment towards growth stocks that are sensitive to changes in investor mood.
On the other hand, BYD Co. recorded the steepest decline today, falling 6.9%. BYD's fall signals that selling pressure is also hitting stocks that are usually favored during times of market optimism so when sentiment worsens, "leader" stocks can also become the quickest targets for profit taking.
The bottom line: The Hang Seng is facing broad based pressure not just from one sector. When the majority of stocks are down, and large stocks like Alibaba and BYD are also weighing on the market, the market usually still needs a new catalyst to stabilize. If there is no positive trigger, a "down today, more tomorrow" pattern is still possible. (arl)[sma]
Source : Newsmaker.id
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