Hang Seng Index
Get more with myNEWS
A personalised news feed of stories that matter to you
Learn more
Hong Kong stocks fell for a second straight day on Tuesday. Photo: Reuters

Hong Kong stocks retreat for a second day amid a resurgence in Covid-19 infections and fraying US-China ties

  • Hang Seng Index falls 0.8 per cent at the close, extending a 1.2 per cent decline in the previous session
  • Shares of JD Health International, a unit of e-commerce giant, jump 56 per cent on Hong Kong debut

Hong Kong’s stocks fell for a second day, as the worsening coronavirus pandemic in the city and the United States dented sentiment and tensions between Beijing and Washington showed no sign of easing.

The Hang Seng Index slipped 0.8 per cent to 26,304.56 at the close on Tuesday. It dropped 1.2 per cent a day earlier, after a decision by index compiler FTSE Russell to remove from its global benchmarks eight Chinese companies that have been blacklisted by the US government for having ties to the military.
China Petroleum & Chemical Corp, also known as Sinopec, and China Overseas Land & Investment led the decline on concern that the Trump administration will extend punitive measures against more Chinese companies. Overnight, the US announced sanctions against 14 top Chinese officials for the enforcement of a national security law in Hong Kong.

China’s Shanghai Composite Index lost 0.2 per cent.

Most major markets retreated in Asia except Australia, tracking overnight weakness in US equities. The S&P 500 index fell from a record high, as the fresh wave of coronavirus infections across the US put traders on edge, with New York, Pennsylvania and California facing an alarming uptick in hospitalisation.

Hong Kong is also being ravaged by a fourth wave of Covid-19, with hospital officials reiterating warnings over the growing pressure on intensive care units. The government will start to reimpose some strict restrictions, such as banning dining in restaurants from 6pm and closing gyms and beauty salons, Chief Executive Carrie Lam Cheng Yuet-ngor said at a weekly briefing on Tuesday. The situation has been worsening since last week, with four days of more than 100 new infections daily.

“Risk appetite is struggling to find direction amid rising Covid-19 case counts and possible further US sanctions on China,” said Stephen Innes, a strategist at Axi.

The 14 Chinese officials who are on the sanction list include Wang Chen, vice-chairman of the Standing Committee of the National People’s Congress, the nation’s legislative body; and Cao Jianming, chief prosecutor of the Supreme People’s Procuratorate, the main agency responsible for both prosecution and investigation. They face a travel ban to the US and freezing of their assets.

Xin Lijun (centre), CEO of JD Health, is congratulated during a ceremony on Tuesday to mark the listing of the company’s stock on the Hong Kong stock exchange at the JD headquarters in Beijing. Photo: AP Photo

Sinopec sank 4.8 per cent to HK$3.40 and China Overseas Land shed 4 per cent to HK$17.80. CNOOC lost 3.9 per cent to HK$6.89.

HSBC Holdings slumped 3.6 per cent to HK$41.35, accounting for 40 per cent of the loss on the Hang Seng Index. Hong Kong police had asked the UK lender to freeze accounts belonging to former lawmaker Ted Hui Chi-fung and his family, after he fled to the UK to avoid charges tied to last year’s anti-government protests. HSBC’s shares had rebounded 55 per cent from a September low through last week.

JD Health International, a unit of e-commerce giant, rose as much as 76 per cent to HK$123.90 from its initial offer price on the first day of trading in Hong Kong, underscoring investors’ appetite for new shares after China abruptly suspended Ant Group’s record-breaking IPO last month. The stock trimmed gains at the close to HK$110.

Great Wall Motor surged 12 per cent to HK$15.66 after reporting 26 per cent year on year increase in car sales in November. The mainland-traded stock added 3.4 per cent to 25.89 yuan in Shanghai.