HK shares close 2.5% lower as stimulus concerns dent risk appetite

Hong Kong shares slumped 2.5% on Tuesday, pulling back sharply from the previous session's rally, as global investor concerns over the timing of aggressive U.S. stimulus and rising Sino-U.S. tensions whacked risk appetite. ** The Hang Seng index ended down 767.75 points or 2.55% at 29,391.26 - biggest one-day drop for the index since May 22, 2020. The index closed 2.42% firmer on Monday. ** The Hang Seng China Enterprises index fell 2.22% to 11,695.43. ** Investors are jittery about the timing of U.S. stimulus, with Senate Democratic Majority Leader Chuck Schumer warning a stimulus bill may not pass for four to six weeks. ** China-U.S. relations also continue to weigh on sentiment. China said on Tuesday it will conduct military exercises in the South China Sea this week, just days after Beijing bristled at a U.S. aircraft carrier group's entry into the disputed waters. ** U.S. President Joe Biden wants to approach relations with Beijing with "patience," the White House said on Monday. ** The sub-index of the Hang Seng tracking energy shares fell 2.2%, while the IT sector dropped 4.29% and the financial sector ended 2.17% lower. ** The Hang Seng TECH index, which hit a record high on Monday, slipped 2.34%. ** That index was pulled lower by Tencent Holdings Ltd , which fell 6.26% a day after heavy buying by mainland investors drove it nearly 11% higher. ** China's main Shanghai Composite index closed down 1.51% at 3,569.43 points, while the blue-chip CSI300 index ended down 2.01%. ** Index provider MSCI Inc said it will delete securities of five Chinese companies, including two Hong Kong-listed firms, from some indexes as of the close on Jan. 27 in the absence of any guidance. ** CGN Power Co slumped 7.03% and Inspur International dropped 2.68%.

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