Hong Kong, China markets plunge as Covid-19 mutation threatens recovery outlook, US expands China blacklist
- Hang Seng Index declines 0.7 per cent, the Shanghai Composite Index tumbles 1.9 per cent
- Hong Kong joins several countries in banning flights from UK over highly infectious Covid-19 strain
The Shanghai Composite Index fell 1.9 per cent, the most since September 7, as several blacklisted companies tumbled.
“Investors are worried that the mutation of the Covid-19 strain will make the situation more difficult to control. This has led to concerns that even with the roll-out of the coronavirus vaccines, it may take longer than expected for the economy to recover,” said Stanley Chan, director of research at Emperor Securities.
“Worries over President Donald Trump’s sanctions on blacklisted companies, and concerns over [China’s] antitrust laws have also continued to weigh on market sentiment. The Hang Seng Index will continue to test the 26,000 level, and it wouldn’t be surprising if it fell past that level. Stocks have fallen across all sectors,” he added.
Of the 52 Hang Seng Index constituent members, 42 fell on Tuesday, paced by Geely Auto, which plunged 5.4 per cent. Casino operators also dropped, with Galaxy Entertainment slumping 3.1 per cent and Sands China tumbling 3.5 per cent. Developers CK Asset lost 2.1 per cent and Wharf REIC retreated by 2.3 per cent.
Major markets in the Asia-Pacific region also took a heavy beating. South Korea’s Kospi dropped 1.6 per cent, Japan’s Nikkei 225 fell 1 per cent and Australia’s S&P/ASX200 dropped 1.1 per cent.