Hong Kong’s key stock index claws back some of its earlier losses after a short hiatus, as global equity rally regains pace
- Futures contracts indicate that the Dow Jones index would open with gains of up to 2 per cent, after an overnight rout of 6.9 per cent, the biggest one-day loss in 12 weeks
- Some US states seeing surge in coronavirus cases
Hong Kong’s benchmark stock index clawed back some losses from its weakest open in three weeks, as the worldwide rally of equity markets regained momentum after a temporary hiatus overnight, amid the record release of financial liquidity by global central banks.
The Hang Seng Index slid 0.7 per cent to close at 24,301.38, recovering from an intraday slump of as much as 2.4 per cent, the most since May 22. The benchmark declined 1.9 per cent for the week. In mainland China’s markets, the Shanghai Composite Index slid by 0.04 per cent while the Shenzhen Composite Index gained 0.3 per cent.
Major markets in Asia tumbled, with benchmarks in Japan, South Korea and Australia retreating. Investors flocked to safe assets for havens, driving up the US dollar index and gold futures.
With stocks almost recuperating the loss sparked by the pandemic, investors began to reassess the growth outlook of the world’s largest economy. Federal Reserve Chairman Jerome Powell said this week that a full recovery from the damage of the epidemic had a long way to go.
“Investors have been arguing in recent weeks that the stock market performance and economic reality have been disconnected, wondering when reality might hit the market,” said Tai Hui, chief strategist for Asian markets at JPMorgan Asset Management in Hong Kong. “The fear of a rising rate of Covid-19 infections is the most important driver in our view for this sell-off.”