Lira turmoil weighs on local, regional markets

Hong Kong stocks ended the day in the red on Monday, with investors shaken by a plunge in the Turkish lira as they weighed the impact of rising bond yields and improving economic recovery.

Regional markets also struggled to find direction after the Turkish lira nosedived more than 15 percent following the sacking of the country’s hawkish central bank head over the weekend, raising fears of capital controls to stop the bleeding.

The Hang Seng Index opened nearly 200 points lower, but recovered to gain about 150 points. It hovered in a narrow range between gains and losses, before finishing the day down 105 points, or 0.4 percent, to 28,885.

Turnover was HK$134.2 billion.

The biggest loser on the index was Sunny Optical; the smartphone equipment supplier sank five percent.

Tech shares were mixed. Meituan slid 3.6 percent and Alibaba declined 1.5 percent. But heavyweight Tencent added one percent, while Xiaomi put on 1.9 percent.

Markets across the border were supported by banking and infrastructure shares, after Beijing kept its benchmark lending rate for corporate and household loans unchanged.

The Shanghai Composite Index, the blue-chip CSI300 index, and the Shenzhen Composite each rose around one percent.

In Japan, the Nikkei tumbled 2.1 percent. Seoul’s Kospi edged down 0.1 percent. But Taiwan inched up 0.7 percent. And Australia was 0.7 percent higher.