Hong Kong stocks slide as virus fears shake markets while China dents hopes for policy easing
- Hang Seng Index slipped amid a flight to safety with the strength of global economic recovery in doubt
- China’s central bank kept its key rates unchanged amid speculation for a policy easing amid a slowdown
The Hang Seng Index fell 0.8 per cent to 27,259.25 at the close of Tuesday trading, adding to a 1.8 per cent slide on Monday. The decline has trimmed the benchmark’s gains this year to a mere 0.1 per cent. The CSI 300 gauge of the biggest mainland Chinese stocks fell 0.1 per cent. Ten-year Treasury yield earlier slipped below 1.2 per cent for the first time since February.
Alibaba Health led declines among blue chips, plunging 7.4 per cent to HK$14.28. Country Garden Services fell 3.7 per cent to HK$74.35, while Geely Automobile retreated 3.4 per cent to HK$22.90. HSBC lost 1.6 per cent to HK$42.05, while Standard Chartered slid 2.6 per cent to HK$45.10.
“Investors are worried that a fresh outbreak could potentially hinder the pace of economic reopening,” said Tai Hui, chief Asia market strategist at JP Morgan Asset Management. “The next one to two months will be an important litmus test on governments’ strategy in normalising lives and economic activities.”
Total confirmed cases of Covid-19 topped 190 million on July 19, including over 4 million deaths, according to the World Health Organization. The highly contagious Delta variant has now spread to over 111 countries, daunting efforts to reopen economies.
Elsewhere, PetroChina dropped 3.6 per cent to HK$3.24, while Sinopec declined 2.7 per cent to HK$3.56 after OPEC+ members agreed to boost crude oil supply from August.