(Bloomberg) — Hong Kong stocks are poised to end the week as the world’s worst performers.

While the tiptoed into a slim gain Friday, the gauge was heading for a weekly decline of 3.3% as of 11:33 a.m. It dipped back below its 50-day moving average earlier this week, just days after rising above it.

Local unrest and the trade war have conspired to drag shares lower, while the Federal Reserve’s rate cut this week was seen unlikely to feed into the cost of credit for businesses and households in a city whose dollar peg means that it imports U.S. monetary policy.

Months of protests have unnerved investors and consumers and raised the prospect of capital flight. A range of indicators weakened sharply in July and August, signaling that the city could tip into recession. Fitch Ratings Inc. this month downgraded Hong Kong as an issuer of long-term foreign currency debt for the first time since 1995.

“The protests are the biggest drag on sentiment and unless that issue is resolved the market will remain weak,” said Alvin Cheung, associate director of Prudential (LON:) Brokerage Ltd. “The government expects a big hit to the city’s economy in the second half, and that could filter through to corporate earnings and weigh on the Hang Seng Index.“

MTR Corp. was heading for a 5-day decline of 2.5%, ending a week during which one of its trains derailed in Hong Kong, dealing a fresh blow for the developer and subway operator that has become a target and battleground in the anti-Beijing demonstrations rocking the city. A stock gauge of property developers was heading for a 2.5% drop.

To contact Bloomberg News staff for this story: Amanda Wang in Shanghai at twang234@bloomberg.net

To contact the editors responsible for this story: Sofia Horta e Costa at shortaecosta@bloomberg.net, David Watkins, Kevin Kingsbury

©2019 Bloomberg L.P.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link