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

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.