Hong Kong’s Hang Seng index drops nearly 2% on tech rout

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Hong Kong shares fell on Monday after the U.S. Senate passed a $1.9 trillion stimulus bill, raising inflation worries, while a low economic growth target in China prompted fears of tighter policy to rein in lofty valuations. ** At the close of trade, the Hang Seng index was down 557.46 points, or 1.92%, at 28,540.83. The Hang Seng China Enterprises index fell 2.46% to 11,014.79. ** Tech shares slumped 6.4% and the IT sector fell 5.91%, dragging the broader index lower. ** Those falls outweighed gains in energy shares, which rose 1.6% on higher oil prices, while the financial sector ended 0.29% higher and the property sector rose 0.26%. ** China on Friday set a modest annual economic growth target, at above 6%, which was significantly below the consensus of analysts, who expect growth could beat 8% this year. ** While some analysts saw the conservative target as an indication policymakers could take action to curb asset bubbles, others took a more sanguine view. ** “Our outlook for further cyclical upside remains intact as global re-opening is being helped by vaccination,” Wendy Liu, head of China Strategy at UBS Global Research, said in a note. ** “We believe the current phase of consolidation may conclude when the so-called core growth companies … (test) their respective 100-day or 200-day moving averages and their growth prospects are re-confirmed during the upcoming results season,” she said. ** China’s main Shanghai Composite index closed down 2.3% at 3,421.41, while the blue-chip CSI300 index ended down 3.47%. ** The yuan was quoted at 6.5209 per U.S. dollar at 08:08 GMT, 0.38% weaker than the previous close of 6.4965. ** About 4.91 billion Hang Seng index shares were traded, roughly 164.4% of the market’s 30-day moving average of 2.98 billion shares a day. (Reporting by Andrew Galbraith; Editing by Subhranshu Sahu)