Hong Kong stocks sink on earnings and vaccine woes, China markets skid to mid-December low amid flight to safety

Hang Seng Index completed a fourth day of losses, the longest streak since January, on weak earnings report cards, vaccine suspension
Rising Covid-19 cases have prompted Germany to extend its lockdown through Easter, stoking worries global economic recovery would be derailed

Hang Seng Index

Martin Choi

Published: 10:46am, 24 Mar 2021

Why you can trust SCMP

Hong Kong stocks skidded for a fourth day in the market’s longest losing streak since January while mainland markets hit the lowest in more than three months on weak earnings reports. An increase in Covid-19 cases reignited concerns about global recovery, setting off losses in US and Asian markets.

The Hang Seng Index fell 2 per cent to 27,918.14 to lowest level since January 11, bringing the four-day slide to 5.1 per cent and to 10.2 per cent since from its February 17 peak. The CSI 300 of biggest stocks in Shanghai and Shenzhen retreated 1.6 per cent to the lowest level since December 11, while the tech-heavy ChiNext in Shenzhen slipped 1.3 per cent.

Losses accelerated as the Hong Kong government suspended Covid-19 vaccinations using BioNTech doses until further notice, as health officials indicated more than 50 instances of defective packaging such as cracked and leaked vials.

“Market sentiment is very weak. There is broad selling pressure across sectors,” said Stanley Chan, director of research at Emperor Securities. “Investors are worried that a slowdown in Hong Kong’s vaccination roll-out would affect prospects of economic recovery and the opening up of borders.”

Geely Automobile plunged 12 per cent to HK$19.90 after reporting a 32 per cent drop in 2020 earnings. The carmaker’s plan to list on Shanghai’s Star market is said to have hit a snag as regulators questioned its suitability for the tech board, according to a Bloomberg report.

Kuaishou Technology slumped 12 per cent to HK$265 after the company’s losses widened to US$2.9 billion due to higher operating expenses. Tencent fell 0.8 per cent to HK$623.50 before its earnings report, which beat market estimates. The stock, the biggest Hang Seng Index component, has fallen 18.7 per cent from HK$766.50 peak on January 25.

01:10

Macau starts using China’s Sinopharm’s Covid-19 vaccine despite a lack of Phase 3 clinical data

Macau gaming stocks were hit by news that Hong Kong and Macau have suspended BioNTech vaccinations from some batches due defective packaging. Sands China fell 4.1 per cent to HK$37.20, while Galaxy Entertainment dropped 2.8 per cent to HK$67.50.

Germany said it will extend its lockdown through Easter amid surging virus rates. The Czech Republic, which currently has the world’s highest per capita death rate from the disease, has also seen a jump in reinfections.

07:42

Patrick Nip addresses slow take-up rate of Hong Kong's Covid-19 vaccination programme

Markets in the Asia-Pacific were mixed. Japan’s Nikkei 225 fell 2 per cent, while South Korea’s Kospi slipped 0.3 per cent. Australia’s S&P/ASX 200 added 0.5 per cent. US equities slipped by 0.8 per cent to 1.1 per cent in overnight trading, while crude oil slumped. A flight to safety buoyed US government bonds.

In Shanghai, China Merchants Bank fell 2.4 per cent to 52.20 yuan, while China Tourism Group Duty Free dropped 1.7 per cent to 295.04 yuan. Two companies surged on their debut.

Jahen Household Products, which manufactures plastic products, rose 323.5 per cent to 70 yuan from its listing price of 16.53 yuan in Shenzhen. Nantong Xingqiu Graphite Equipment gained 84.1 per cent to 61.90 yuan from its offer price of 33.62 yuan in Shanghai.

Post