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Thursday’s losses were made worse by declines in technology blue-chip stocks, which have rallied despite Hong Kong’s anti-government protests in the past. Photo: AP

Hong Kong, China stocks record big declines as Wuhan coronavirus weighs on sectors ranging from airlines to film producers

  • The Shanghai Composite closes 2.8 per cent lower for its biggest daily loss since May 6
  • The Hang Seng Index declines by 1.5 per cent, falls below 28,000-points level

China stocks recorded their biggest daily loss in eight months on Thursday, while the Hong Kong market also suffered sharp losses. The spread of the Wuhan coronavirus that led to a lockdown of the central Chinese city was behind a new round of sell-offs ahead of the Lunar New Year holiday.

The Shanghai Composite Index closed 2.8 per cent lower at 2,876.53, recording its biggest daily loss since May 6, 2019, when US President Donald Trump threatened to increase tariffs on Chinese goods. This brought the benchmark’s losses during the four-day trading week – shortened by the holiday – to 3.2 per cent.

The Hang Seng Index declined by 1.5 per cent, or 431.92 points, to close at 27,909.12 on Thursday.

“There’s no point to go in now [for prospective stock buyers]. I would say investors ought to sit it out through Lunar New Year, as we do not know how the outbreak will spread, or what other external factors could happen while the mainland and Hong Kong stock exchanges take a break during the holidays,” said Louis Tse Ming-kwong, managing director at VC Asset Management.

The losses were made worse by declines in technology-linked blue-chip stocks, which have rallied despite Hong Kong’s anti-government protests in the past, he said.

The Chinese government on Thursday placed a travel ban on Wuhan, capital of the central province of Hubei. More than 570 people have been infected by the virus, while 17 people have died.

All sectors declined in the A-share market, according to gauges compiled by Shenwan Hongyuan Securities. Agriculture-related stocks suffered the most, with a gauge tracking 84 stocks falling by 4.7 per cent.

Entertainment stocks fell in afternoon trading, after producers of all seven films scheduled for release during the Lunar New Year holiday announced they would postpone their releases as a result of the outbreak.

Producer Beijing Enlight Media fell by 5 per cent to 10.57 yuan, after the maker of Legend of Deification, an animated film produced by its subsidiary, said it would release the film at another time and refund any audience members who had bought tickets.

Airlines weakened on fears that the Wuhan lockdown could escalate and affect more regions as the virus spreads. China’s aviation authority has asked airlines to reduce flights to Wuhan. Air China shed 4 per cent to HK$6.71 in Hong Kong, while China Eastern Airlines dropped 2.6 per cent to HK$3.77.

Meanwhile, shares of internet of things technology and products provider Shenzhen Neoway Technology surged by 178.2 per cent to 56.61 yuan following its debut on Shanghai’s Star Market on Thursday. China’s IoT sector is expected be worth two trillion yuan by this year, according to Huatai Securities, which cited data from China R&D Center for Internet of Things, a research institute managed by the Chinese Academy of Sciences.

In Hong Kong, Macau casino operators suffered a sharp fall after a second case of coronavirus infection was confirmed in the city, and the city’s government cancelled all celebratory events for the upcoming Lunar New Year holiday. Melco International Development led the declines with a 5.7 per cent drop to HK$18.5.

Additional reporting by Iris Ouyang