Market Update – 28th July 2021.

Equities in both China and Hong Kong have fallen heavily so far this week as China’s President, Xi Jinping, continues to clampdown on the power of big Chinese companies.

In fact, Hong Kong’s Hang Seng Index is currently down nearly 7% so far this week – meaning it is now not only back to levels seen last October, but it has also given up nearly two-thirds of the gains it made since its low last March (at the height of the coronavirus panic).

Thankfully, however, this brutal sell-off has been contained to China and Hong Kong – as markets here in the UK, Europe and the US are little changed as we await the outcome of tonight’s (7pm UK time) Fed monetary policy meeting to see how policymakers currently view the economic recovery, given the recent increase in coronavirus infection rates and the inflation outlook.  We will be analysing the minutes to see if policymakers still view inflation as transitory and for any hints that the economic recovery could slow down – as both of these could put a stop to the recent tapering talk.

Investment Management Team