Hong Kong’s stock index plunges to a six-year low as bad news from Ukraine war to China’s worsening Covid-19 outbreaks trigger tech rout

Hong Kong’s key stock index plunged to a six-year low, tracing declines in the Shanghai and Shenzhen markets as a deteriorating Covid-19 outbreak in mainland China combined with the Ukraine war and other negative news to weigh on sentiments.

The Hang Seng Index ended the day at 19,531.66, a decline of almost 5 per cent and the biggest one-day plunge in 22 months. The Hang Seng Tech Index tumbled by 11 per cent, its steepest daily loss since its creation in July 2020.

In Shenzhen, a weeklong citywide lockdown to contain the spread of the Covid-19 disease in a city dubbed China’s Silicon Valley weighed on sentiments, causing the Shenzhen Component Index to fall to 14,847.90, or 3.4 per cent lower than last week. In Shanghai, where scores of neighbourhoods across the city’s 16 administrative districts had been partially locked down, the benchmark Composite Index fell 2.6 per cent to 3,223.53.

“The worsening Covid-19 outbreak will hurt service industries and dent consumer confidence in the short term,” said CMB International’s research team in a note published on Monday. “That makes Beijing’s GDP target of 5.5 per cent tougher to achieve, bolstering calls for further policy easing, including moderate interest rate cuts.”

JD.com led index losses in Hong Kong with a record plunge of 14.8 per cent to HK$180, after tumbling 11 per cent on Friday. Alibaba Group Holding, the owner of this newspaper, crashed 10.9 per cent to HK$80.90, another record low.

China’s technology stocks plunged, after regulators rolled out further controls to shield minors from video games. Tencent Holdings, China’s largest social network operator and games publisher, slumped 9.8 per cent to HK$331.80 amid reports of the new regulations.