Hong Kong stocks record biggest daily loss in more than five months after Wuhan pneumonia outbreak speeds up profit taking
- Pharmaceuticals rise while Macau casinos, restaurant chains and airlines tumble
- Shanghai Composite falls 1.4 per cent to close at 3,052.14, its largest daily loss since November 11
Markets slumped across Asia on Tuesday, with Hong Kong stocks recording their biggest daily loss in more than five months, on deepening fears over the outbreak of a new pneumonia coronavirus in mainland China, as well as a downgrade in Hong Kong’s rating by Moody’s Investors Service.
The Hang Seng Index tumbled by 2.8 per cent, or 801.58 points, to close at 27,985.33, falling by the most in a day since August 5. In China, the Shanghai Composite Index fell 1.4 per cent to close at 3,052.14, its largest daily loss since November 11.
Elsewhere in Asia, the Nikkei 225 Index weakened 0.9 per cent, while South Korea’s Kospi declined 1 per cent.
The sharp fall in Hong Kong and China stocks was a result of investors stepping up profit taking ahead of the Lunar New Year holiday, as concerns deepened over the outbreak of a new coronavirus strain, Kenny Wen, wealth management strategist at Hong Kong-based brokerage Everbright Sun Hung Kai, said.
“As Lunar New Year draws near, people are worried about the pneumonia situation and [are selling] shares faster to pocket gains,” he said. “The public’s attention towards the virus outbreak has increased significantly over the past 24 hours.”
The Hang Seng Index had gained about 3,000 points – or 11 per cent – between a low on December 4 and a recent high on Friday.
This could be a healthy consolidation and represent buying opportunities for investors looking for a timing to catch up on the gains, according to Wen. The Hang Seng Index is unlikely to dip below 27,700 points, which is a firm support level, he said.