Bank of Communications, HSBC weigh on Hang Seng Index as global coronavirus concerns once again come to the fore

Markets are worried that a renewed onslaught of the coronavirus pandemic would hurt global economic recovery, says Stanley Chan of Emperor Securities

Four stocks traded for the first time in Hong Kong, while two made their debuts in Shanghai

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The CSI300 index that tracks performances on both the Shanghai and Shenzhen markets rose on Tuesday. Photo: Reuters

Published: 11:25am, 29 Sep 2020Updated: 4:56pm, 29 Sep 2020

Hong Kong markets retreated on Tuesday as investors were weighed down by concerns over a resurgence of the global coronavirus pandemic.

The Hang Seng Index rose by as much as 0.5 per cent in early trading, before ending the day 0.9 per cent lower at 23,275.53. It had climbed 1 per cent on Monday for its best day since August 24, after recording its steepest weekly loss since March last week.

The worldwide death toll from the coronavirus topped 1 million on Tuesday, as Europe faced another surge in cases leading to stricter curbs. The US accounted for around 205,000 deaths, or one out of five worldwide, adding to worries that there could be a further increase in infections as winter approaches.

The grim milestone has put the markets on edge about the instability of economic recovery, said Stanley Chan, director of research at Emperor Securities.

“The markets are worried that if there is another outbreak, some places may need to further tighten restrictions which would impact economic recovery,” said Chan. “Stocks related to the banking sector have been under pressure recently. The operating outlook for the banking industry is very much tied to the overall situation of the economy, which is not doing so well. Sentiment is weak for both international banks and mainland banks.”

Banking stocks led the declines in Hong Kong, with Bank of Communications falling 4.2 per cent, while Hang Seng Bank declined 3.2 per cent. ICBC dropped 1.5 per cent, while China Merchants Bank plunged 6 per cent.