Chinese stocks suffered their worst week in a month as Beijing’s move to tighten the screws on Macao casinos and fears of a potential collapse of China Evergrande Group underscored the risks of investing in the nation’s equities market.
A soft rebound on Friday was small consolation for investors, with Hong Kong’s Hang Seng Index and the mainland’s CSI 300 gauge still ending the week down more than 3% each. The HSI is trading near the lowest level in almost a year and few more down days could put the CSI in the same position.
"Risks are skewed to the downside amid the double whammy of macro weakness and regulatory uncertainty,” Morgan Stanley strategists including Laura Wang said in a research report. The Wall Street bank cut its targets for the HSI and Hang Seng China Enterprises Index by 4% while noting the difficulty in quantifying the impact of Beijing’s crackdown.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.