Hang Seng slides as Hong Kong may up spending to shrink income gap

<p>The Hang Seng has lost ground ahead of Hong Kong’s latest budget announcement.</p>

The Hang Seng closed lower on 22519.6 points today (February 26th) on news Hong Kong could boost spending on the poor and elderly in a bid to close the widening income gap.

In its first budget under chief executive Leung Chun-ying tomorrow, the government is expected to report a surplus of HK$55 billion (£4.6 billion), boosting reserves to a record of HK$724 billion, Bank of America economist Marcella Chow told Bloomberg.

The budget presented by financial secretary John Tsang is anticipated to focus on alleviating poverty and helping the aged.

According to a median estimate of Bloomberg analysts, Hong Kong's economy expanded by 2.4 per cent in the final quarter of 2012 year on year, which is up from the 1.3 per cent logged in the third quarter.

Mr Tsang will give his latest estimate on both the budget surplus and fourth-quarter and full-year data on gross domestic product tomorrow.

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