Hong Kong Stocks Tumble Again; in Mexico, a New High

Share prices tumbled nearly 2.5% in the first two days of trading under the Chinese flag as investors took profits and swapped high-priced Hong Kong property stocks for cheap Thai shares.

Mexican stocks closed at a fourth straight record Friday as domestic investors bet strongly on the local market ahead of national elections, despite the absence of their U.S. counterparts, who were celebrating the Fourth of July holiday.

Shares closed lower on the London Stock Exchange after soaring to a record high Thursday amid frenetic trading.

The poor performance of stocks on the Hong Kong market was not the auspicious start that many analysts and traders had forecast, but it did show that the hand-over is already history and that Hong Kong is back to business as usual.

Investors were chasing bargains in Thailand following the effective devaluation of its currency, the baht, and dumping property stocks following a pledge by Hong Kong’s new chief executive to take “serious measures” to curb spiraling real estate prices.

A buying frenzy pushed the blue-chip Hang Seng index to an all-time high on the last day of stock exchange trading under the British a week ago. The new record stood at 15,196.79 points.

On Thursday, the first day of trading after a five-day hand-over holiday to mark the switch in sovereignty, the index hit a new trading high of 15,363.61 early in the session. But it immediately started falling and closed at 15,055.74, down 141.05 points, or 0.93%.

On Friday, the Hang Seng index continued to slide, losing 232.77 points, or 1.5%, to close at 14,822.97.

Results were mixed on other markets.

Mexico City’s key Bolsa index closed up 51.86 points, or 1.1%, to 4,643.53 points ahead of Sunday’s elections. In London, the FTSE-100 closed at 4,812.8, down 18.9 points, or 0.39%.

Tokyo share prices dropped in light trading Friday on news of a bankruptcy of a medium-sized contractor. The Nikkei-225 index fell 153.41 points, or 0.76%, closing at 19,968.00 points. The Nikkei average, the market’s main index, last closed below the 20,000-point mark on May 27, finishing at 19,889.89.

The U.S. dollar rose against major currencies in late European trading Friday. In London, the dollar was trading late Friday at 1.7580 German marks, up from 1.7490.