Hong Kong, China stocks fall amid renewed lockdown concerns globally to contain Covid-19, sell-off in HSBC continues
- Hang Seng Index fell 1 per cent to 23,716.85, extending losses for a second straight session.
- HSBC eased 2 per cent to HK$28.70, falling to its lowest level since 1995
Hong Kong and China stocks fell on Tuesday over concerns about economic recovery amid fears of renewed lockdowns to contain the coronavirus pandemic, while reports about financial institutions moving illicit funds continued to hit banking stocks.
The Hang Seng Index declined 1 per cent to 23,716.85, extending losses from Monday when it fell the most in two months. The CSI300 index that tracks performances on both the Shanghai and Shenzhen markets lost 1.2 per cent to 4,635.76.
“The global coronavirus situation is a key factor bringing the markets down today,” said Louis Tse Ming-kwong, managing director of VC Asset Management.
The sell-off in HSBC shares also helped to pull the Hang Seng Index down, he added.
HSBC told its staff not to post anything on the bank’s social media accounts until at least 11am UK time to avoid negative reactions to the leaked suspicious activity reports, Bloomberg reported.
“Banking shares are sharply lower following the International Consortium of Investigative Journalists report examining bank behaviour in the context of suspicious activity reports,” said Stephen Innes, chief global markets strategist at AxiCorp.
Geely Auto led the fall in Hong Kong with a 4.4 per cent drop, while Galaxy Entertainment declined 3.3 per cent.
Leading US benchmarks dropped overnight on fears of a coronavirus lockdown in Europe and delays in fresh stimulus packages from the US Congress. The Dow Jones Industrial Average fell 1.8 per cent, while the S&P 500 retreated 1.2 per cent.
“The rising case count in Europe and concern that the summer recovery is probably as good as it gets when it comes to the rebound in economic activity weighs on cyclical [stocks],” said Innes. “The chances of a fiscal stimulus package ahead of the election have likely been derailed by the Supreme Court vacancy in the US.”
The Shanghai Composite Index fell 1.3 per cent to 3,274.30, extending losses from Monday. Shanghai Aero Auto Electromechanical led losses, dropping by the daily limit of 10 per cent.
Chinese securities firms bucked the trend, with a gauge of the sector compiled by Xuangubao.cn rising 0.9 per cent. Guoyuan Securities rose to the upper daily limit of 10 per cent, while Soochow Securities also rose 2.2 per cent.
Five stocks that traded for the first time soared on their debuts on the Hong Kong, Shanghai and Shenzhen exchanges.
Wuhan Keqian Biology, a producer of veterinary drugs including vaccines for poultry and pigs, more than doubled to 31.58 yuan from its initial public offering price of 11.69 yuan on the Shanghai exchange.
Road Environment Technology, a waste water treatment company based in Wuhan, rose 84.2 per cent to 29.30 yuan from its offer price of 15.91 yuan.
Shanxi Huhua Group, which produces and sells explosives for civilian use, rose by 44 per cent to 11.84 yuan, from its IPO price of 8.22 yuan when trading began on the Shenzhen exchange.
Huazhu Group, a Shanghai-based hotel operator, rose 4.7 per cent to HK$311 from its secondary listing price of HK$297 on the Hong Kong exchange.
Beijing Jingyeda Technology, which provides education services, rose 44 per cent to 45.84 yuan from 31.83 yuan in Shenzhen.
