Hong Kong stocks in worst one-day fall since 2008 as Xi tightens grip on power

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Hong Kong stocks suffered their worst single session since the 2008 financial crisis after Chinese leader Xi Jinping tightened his grip on power.

The Hang Seng HSI, +0.21% ended more than 6% lower to a new 13-year low, with tech giants including JD.com 9618, +2.47% JD, -13.02%, Baidu 9888, +0.06% BIDU, -12.58%, Tencent 700, -0.29% and Alibaba 9988, +1.54% BABA, -12.51% dropping between 11% and 13% each.

American depository receipts of Chinese companies also tumbled, as did key China-themed ETFs FXI, -9.99% KWEB, -14.17%.

The U.S. dollar rallied against the Chinese yuan USDCNH, +0.21%, with the greenback rising against the offshore yuan to 7.3180 from 7.2293.

The local Shanghai Composite SHCOMP, -0.09% index fell a less dramatic 2%.

Over the weekend, the 69-year-old Xi secured his third term as general secretary of the Chinese Communist Party. Reporters captured video of former Chinese President Hu Jintao getting escorted out of the closing ceremony. Four of the seven standing committee members were replaced, all of whom are at least 60 years old.

Analysts at Goldman Sachs say most of the new appointees worked with Xi at earlier stages of their careers. “We note that incoming leaders could arguably be more focused on ideological and political subjects while the retiring policymakers appear more economy/market-oriented,” they said.

They added that for valuations to improve, more clarity on the zero COVID policy, stabilization of the property markets, and de-escalation of both cross-straits and U.S.-China tensions would be needed.

China also reported delayed data, saying its economy grew at a 3.9% year-over-year rate in the third quarter, up from 0.4% in the second quarter.

This article was originally published by Marketwatch.com. Read the original article here.

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