Hong Kong has “resilient” systems to cope with stock market volatility, Chief Executive John Lee has said, as the city’s Hang Seng Index plunged to a 13-year low a day after Chinese leader Xi Jinping cemented his rule with a historic third term.
The benchmark Hang Seng Index sank 6.4 per cent and closed at 15,180.69 on Monday, the weakest level since April 2009 amid the global financial crisis. The index slipped past 15,000 soon after the market opened on Tuesday morning, but it climbed back up to 15,313.22 as of noon.
Investors were spooked by the leadership reshuffle in China last Sunday, analysts said, which saw Xi claiming his third term in power and promoting his close allies into the Politburo Standing Committee, the pinnacle of political power in the country. Some analysts also pointed to concerns over Beijing’s commitment to stringent zero-Covid policies, which have been blamed for taking a toll on the economy and people’s lives.
There were many factors affecting the global economy, Hong Kong’s leader Lee said during a press conference on Tuesday. He was asked whether he agreed that the announcement of the new Politburo Standing Committee had prompted stocks to slump.
The Hong Kong government has been monitoring the market closely, Lee said, with the aim of ensuring that the systems “run smoothly and effectively.” He said while volatility would be high, the authorities had a “strong response plan” for managing “different contingencies.”
“The government is very confident that the systems we have in Hong Kong [are] effective, resilient. We will monitor the situation to ensure market order and market transactions will go on in accordance with what we expect,” he said.
The chief executive called on investors to monitor the situation closely, assess the risks and make careful decisions according to their positions.
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