The Hong Kong Stock Exchange on Wednesday said it expected to face a challenging second half of the year due to weaker investor sentiment, after Asia’s third largest exchange reported a 6 per cent drop in second quarter net profits.

The bourse said the impact of the global economic downturn had hit average daily trading volumes in the second quarter, which were down 23 per cent on the first three months of the year at HK$76bn ($9.7bn). In July, the average turnover volume slipped to HK$63bn.