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=MARKET BUZZ: Hong Kong’s HSI Extends Losses As Currency Muddles Outlook

HONG KONG (Apr 17) -- Hang Seng declines for fourth straight day, falling 0.8% to 30,062.75 as Hong Kong dollar continues to trade at weak end of its 7.75-7.85 band. Hong Kong Monetary Authority intervenes again in currency markets to defend trading band; monetary authority said earlier today it bought HK$5.77 billion ($735 million) of local currency during US trading hours. One-month HK interbank borrowing rate (HIBOR) rises almost 4 basis points to over one-week highs. “We could see more triggers of the weak-side convertibility undertaking with the LIBOR-HIBOR gap standing at a 10-year high,” Credit Suisse says in note. “The Aggregate Balance (sum of balances in clearing accounts maintained by the banks with HKMA) should gradually shrink and push up interest rates.” Sun Hung Kai Properties leads losses in rate sensitive HK property developers, falling 1.8%. China Shenhua Energy drops 1.6% after reporting 8.7% drop in March commercial coal production. Chinese tech companies among major losers after trading in state-owned ZTE halted in Hong Kong following US ban on sale of equipment to the Chinese telecom-equipment maker. Sunny Optical Technology falls 5.8% and AAC Technologies drops 4.6%. ChiNext, Nasdaq-styled board of Shenzhen Stock Exchange, tumbles 3%. Shanghai Composite closes 1.4% lower despite China reporting 6.8% 1Q GDP growth, tad faster than expected.

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- Edited by Nimesh Vora
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