Hong Kong stocks drop from two-week high as investors ignore government’s move to reopen city
- Blue chips Haidilao and Meituan lead declines with losses of at least 6 per cent
- Hong Kong will lift the ban on some flights, cut the quarantine period for travellers and loosen social-distancing measures next month in a bid to reopen the city
Hong Kong stocks fell from a two-week high for a second day, as investors snubbed the city’s move to lift flight bans and cut the quarantine period for travellers from next month, after an initial boost provided by positive talks between the Chinese and US leaders.
The Hang Seng Index eased 0.9 per cent to 21,221.34, erasing an intraday gain of as much as 1.9 per cent. The Hang Seng Tech Index retreated 1.5 per cent and the Shanghai Composite Index of Chinese onshore stocks added 0.1 per cent.
Chinese chain hotpot restaurant operator Haidilao International Holdings, property developer Country Garden Holdings and Meituan were among the biggest decliners, falling more than 6 per cent. Cathay Pacific Airways, Hong Kong’s flagship carrier, gained for a fourth day.
Trading remained choppy even after a roller-coaster ride over the past week. Implied swing of the Hang Seng Index jumped to a two-year high last week, with sentiment swayed by panic selling and dip buying. The Hang Seng Index ended the week up 4.2 per cent, the first weekly gain in a month, after top officials from Beijing soothed investors by pledging to stabilise economic growth and stocks, and resolve the regulatory risk of Chinese companies listed in the US.
Hong Kong will ease lockdown measures starting next month, lifting the ban on some flights, reducing the quarantine period for arrivals and relaxing some of the social-distancing rules in phases, Chief Executive Carrie Lam Cheng Yuet-ngor said on Monday.
In a video conference on Friday, Chinese President Xi Jinping told US President Joe Biden that China does not want the Russia-Ukraine war to exacerbate, adding that Beijing stands for peace and opposes war. Biden, in turn, said that the US had no intention of seeking a conflict with China and will not support Taiwan’s independence, according to the state-run Xinhua News Agency. Issues such as tariffs imposed by the Trump administration and sanctions against some Chinese companies for human rights violations were not discussed.
