A rally in global equities faltered Monday under the weight of declines in Chinese shares, with US futures and key Asian indexes losing a large part of earlier gains that were made amid a dip in Treasury yields.
A gauge of dollar strength advanced in choppy trading that saw wild swings in the yen amid signs of a second intervention from Japanese authorities in two sessions. China’s yuan also weakened as investors in assets from currencies to equities reacted to the risks posed by President Xi Jinping’s move to stack his leadership ranks with loyalists. Hong Kong’s Hang Seng Index dropped about 5%, with technology companies among the worst affected.
“The Hong Kong market is seeing a panic selling moment,” said Dickie Wong, executive director of research at Kingston Securities Ltd. “While China reported macro data that beat expectations, the market is on a way down, as the leadership reshuffle and tensions between China and US continue to drag down sentiment and add uncertainty.”
Chinese economic data that was delayed last week and published Monday showed a mixed recovery, with unemployment rising and retail sales weakening despite a pickup in growth.
