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Hong Kong shares drop sharply on valuation, interest rate concerns

Hong Kong shares drop sharply on valuation, interest rate concerns

Hong Kong shares tumbled Friday, as stocks declined across the board on concerns over stretched valuations and fears of interest rate hikes on mainland China.
The Hang Seng Index shed 388.70 points, or 1.9 percent, to 20,281.13. Of the index's 36 constituents, 32 ended lower.
Investors were worried that China may raise interest rates to curb its rapidly growing economy, analysts said. The recent correction in mainland China's yuan-denominated "A" shares also pulled the blue-chip Hang Seng Index further off its record high reached Wednesday.
Index heavyweight China Mobile fell 4.6 percent to HK$72.65, after dropping 6.3 percent in the past two days.
China Construction Bank fell 2.5 percent to HK$4.70, while Bank of China dropped 1.5 percent to HK$3.93.
Castor Pang, a strategist at Sun Hung Kai Research, said he expected the benchmark index to meet strong support at 20,000. "Most of the selling pressure has been released in the market downturn the past couple of days," he said.
"I guess the correction in the Chinese banking sector is almost done," Pang said. "I don't see too much downside from here."
Chinese developers continued to fall on interest rate-hike concerns after China said early Thursday its economy expanded 10.7 percent last year, its biggest expansion in more than a decade.
Guangzhou R&F Properties slid 2.8 percent to HK$15.36, Agile Property fell 3.3 percent to HK$6.07 and Shanghai Forte retreated 3.4 percent to HK$2.87.
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Updated : 2021-07-27 00:13 GMT+08:00