Feb 24 Reuters Hong Kong shares posted their worst daily performance in more than nine months on Wednesday after the city announced a hike in stamp duty on stock trading, prompting huge outflows of mainland cash.
The Hang Seng index closed down 2.99 at 29,718.24, its biggest daily percentage drop since May 22, 2020. The Hang Seng China Enterprises index fell 3.36 to 11,509.73.
The market had been under selling pressure, especially selling of those tech, highvaluation shares. And the news regarding the stamp duty just sped up the selling, said Steven Leung, executive director, institutional sales at UOB Kay Hian in Hong Kong.
The stamp duty will rise to 0.13 of the value of the transaction from the current 0.1 on Aug. 1, Hong Kong Financial Secretary Paul Chan announced in his annual budget speech.
Refinitiv data showed outflows of HK13 billion through the southbound leg of the Stock Connect programme linking Hong Kong with the Shanghai and Shenzhen exchanges as mainland investors dumped shares, likely a record, said Yan Kaiwen, an analyst with China Fortune Securities.
Chinese retail investors, who refer to themselves selfdeprecatingly as chives, have helped to propel Hong Kong shares to recent highs on record inflows from mainland investors through Stock Connect.
On Wednesday, some investors on Chinas Redditlike Xueqiu investor community decried the move.
Hong Kongs chivemowing mentality is really inveterate. Theres no future, said a commentator posting as…