Investors prompt an equities rout after the end of the China Communist Party Congress, with many concerned about continued COVID-19 measures.
Equity markets fell materially lower on Monday in Hong Kong and Shanghai on concerns about future governance in China and continued restrictive COVID-19 policies after the end of the China Communist Party Congress on Saturday.
After opening sharply lower, the Hang Seng index continued to decline in the afternoon, dropping more than 6 percent to around 15,200, levels it had not reached since 2009, according to «Nikkei Asia» (registration required). The Shanghai SEE Composite fell almost 2 percent to levels just below 3,000.
According to Nikkei Asia, investors appeared to be concerned about the future COVID-19 approach and President Xi Jinping's appointment to a third term in office, which breaks with past precedent, and given that the country's Politburo Standing Committee is now concentrated with individuals loyal to him.
Alibaba, Tencent Down
Hong Kong English language daily newspaper «South China Morning Post» also featured (registration required) the market's decline prominently on their website, indicating that the appointment of key Xi Jinping allies would prompt continued scrutiny of private business, with the market ignoring the release of better-than-expected China GDP figures on Monday.
The SCMP pointed out that Alibaba was down about 10 percent in Hong Kong and was likely to close at a record low, with Tencent falling over 8 percent.
The Bloomberg Close, an email newsletter sent by the news and information service indicated that investors were giving a «sharp rebuke» to President Xi Jinping's governance, with the yuan also falling. According to them, those allied with the president will oversee all top institutions in China, which gives him more control than he has had previously.
