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Live news updates: Sterling see-saws as markets react to Johnson’s withdrawal

People walk past an electronic billboard showing the Hang Seng Index
The Hang Seng index dropped as much as 5.1% in morning trading, while the CSI 300 fell as much as 2% © Jérôme Favre/EPA-EFE/Shutterstock

Hong Kong and Chinese-listed equities dropped sharply on Monday, as the delayed release of the country’s gross domestic product data sent jitters through markets.

The Hang Seng index dropped as much as 5.1 per cent in morning trading, while the CSI 300 index of Shanghai and Shenzhen-listed equities fell as much as 2 per cent.

The declines followed the unscheduled release of China’s GDP figures and other economic data, which beat expectations with an expansion of 3.9 per cent but still registered far slower growth than the country has become used to in recent decades.

Jitters were intensified by the delay in releasing the data, which was originally scheduled for last Tuesday. The figures were released with little warning after China’s landmark 20th party conference, at which leader Xi Jinping secured a precedent-breaking third term in the country’s most important political roles.

Xi showed little willingness to change tack from his strict zero-Covid policy during the conference. The policy, which seeks to eliminate cases of the virus with strict lockdowns, has hammered China’s growth prospects this year.

“This is panic selling,” said Dickie Wong, head of research at Kingston Securities in Hong Kong. “Quite obviously investors are simply not confident about the future of the Chinese economy.”

In markets elsewhere, Japan’s Topix rose 0.4 per cent and South Korea’s Kospi added 0.9 per cent. Those moves followed sharp increases in the US on Friday, where the S&P 500 and Nasdaq Composite both gained more than 2 per cent after a report that the Federal Reserve might slow the pace of its interest rate rises from December.

Oil prices fell after early gains, with Brent crude, the international benchmark down 0.5 per cent to trade at $93.03 per barrel and US marker West Texas Intermediate declining by the same margin to hit $84.60.

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