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 JD.com, jump 56 per cent on Hong Kong debut

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Hong Kong stocks fell for a second straight day on Tuesday. Photo: Reuters

Published: 10:40am, 8 Dec 2020Updated: 4:56pm, 8 Dec 2020

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.