Hong Kong stocks erase drop as city seen easing air travel curbs derided by bankers, investors

Hong Kong to immediately suspend a flight mechanism that penalises carriers in a move to ease curbs on air travel, government says

Official reports next week may show China’s economy cooled last quarter, while faster inflation to limit scope for further monetary easing

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People walk past a display showing the Hang Seng Index in Hong Kong in April 2022. Photo: AFP

Published: 10:43am, 7 Jul 2022Updated: 5:26pm, 7 Jul 2022

Hong Kong stocks erased losses after the city suspended a flight circuit breaker in a sign that authorities are loosening its stringent travel curbs. Banks and developers powered the rebound from a two-week low.

The Hang Seng Index added 0.3 per cent to 21,643.58 at the close of Thursday trading, overturning a drop of as much as 1.8 per cent. The Hang Seng Tech Index declined 0.5 per cent, while the Shanghai Composite Index climbed 0.3 per cent.

HSBC advanced 1.1 per cent to HK$49.65, while Wharf REIC added 1.7 per cent to HK$36.40 and CK Asset Holdings jumped 1.3 per cent to HK$56.75. Other notable winners included Geely Auto and Orient Overseas, which climbed more than 3 per cent to HK$17.50 and HK$218 respectively.

Hong Kong will immediately scrap a mechanism that penalises carriers for carrying passengers with Covid-19 infections, the government said on Thursday. Travellers will be required to take an additional nucleic acid test, it added. Easier rules may help the city retain its role as an aviation and financal hub, greasing travel bankers and investors.

Stocks earlier fell to near the lowest level since June 23, after a recent flare-up in virus infections clouded recovery bets. Shanghai is conducting a massive screening in most of the 16 districts after the city reported 54 new cases on Wednesday, the most since late May. The eastern province of Anhui locked down two counties to fight an outbreak.

In Hong Kong, health officials expressed concerns about growing new cases. Authorities on Wednesday reported 2,815 infections, while the number of patients in public hospitals had risen to 830 from 400 in June.