The Hang Seng Index extended Tuesday's downtrend and fell another 114 points to close at 27,640, though it had once reached an intraday of 28,054.
The Shanghai Composite Index lost another 1.6 percent yesterday after diving 4 percent the day before. The daily movement was near 5 percent.
The HSI intraday range was 718 points on Tuesday and 484 yesterday.
Investors who focused on trading index futures, options, warrants and bull/bear knock-out warrants would be easily hard hit.
Dr Check hopes that individual investors can be winners, though guessing the index fluctuation is one of the most difficult investments in the world.
There was no particular reason for the two stock markets to undergo healthy correction after sharp gains. The launch of 25 IPOs in China was not the major reason for the market drop as the overnight interbank interest rate in Shanghai did not go up at all, indicating liquidity was still adequate.
It is possible the HSI will further consolidate to near 27,000. That will provide a bargain chance.
Policy-related sectors such as infrastructure suffered heavy profit-taking. China Communication Cons (1800) fell 7.2 percent yesterday. Mainland property developers also turned south.
Evergrande (3333) dropped 5.1 percent, but last week's loser CSR (1766) rebounded 6.6 percent. HKEx (388) fell 1.1 percent , but AIA (1299) rose 1.1 percent with other mainland insurance companies. Money flowed to defensive Mengniu Dairy (2319), pushing it 7 percent higher.
At this level, AH discount shares start to look attractive. Let's closely watch Louyang Glass (1108) and Nanjing Panda (553) on further dips. Dr Check and/or The Standard bear no responsibility for any decision made based on this column.
Source: http://www.thestandard.com.hk/news_detail.asp?pp_cat=1&art_id=156764&sid=44409994&con_type=1
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