Hong Kong Stocks fall on Covid-19 concerns

The Hong Kong stock market finished session lower on Thursday, 29 October 2020, as risk sentiments beaten by tracking a Wall Street retreat overnight on the back of sharp increases in coronavirus cases in the United States, particularly in the Midwest. Selling was also fueled by concerns over a possible European economic slump caused by the second pandemic wave following announcements by the German and French governments of new lockdown measures.

At closing bell, the benchmark Hang Seng Index fell 0.49%, or 122.20 points, to 24,586.60. The Hang Seng China Enterprises Index dropped 0.08%, or 7.90 points, to 9,955.46.

Local declines followed heavy selling in Europe and on Wall Street following rising concerns for the global economy on surging COVID-19 cases in the northern hemisphere. The U.S. has averaged more than 70,000 new coronavirus cases a day over the past week, with 29 states setting new records this month for the most new daily cases since the pandemic began in February. More than 8.78 million cases have been reported nationwide and at least 226,000 people have died of COVID-19, according to data from John Hopkins University (JHU). According to JHU, the average number of daily new cases this past week is up 21% compared to the previous week. The jump in new infections has also been accompanied by an increase in hospitalizations and deaths, leading to worries about new lockdowns.

 

In Europe, Germany and France announced tough new restrictions on businesses Wednesday in a bid to stem the spread of the coronavirus as the countries deal with worsening outbreaks.

Financial stocks weighed on the Hang Seng Index, as investors exited the sector after a rally over the past two weeks built on optimism over their third-quarter earnings. A spate of financial companies are set to release the results after market close on Thursday or on Friday, including China's four biggest state-controlled banks.

AIA Group, the second-most weighted stock in the Hang Seng Index, declined 1.3% to HK$75.60, contributing to a 31-point loss in the benchmark. Ping An Insurance (Group), China's largest by market value, plummeted 1.8% to HK$80.50. HSBC fell 1.1% to HK$32.30, and China Construction Bank dropped 0.7% to HK$5.49.

Technology stocks recouped early losses as sentiment improved over their growth outlook. Meituan Dianping, China's online food delivery giant, jumped 6.1% to close at an all-time high of HK$297.20. Credit Suisse on Thursday lifted its target price to HK$310 from HK$300.

Tencent Holdings also reversed losses to rise 0.7% to a record high of HK$605. Alibaba Group, the owner of this newspaper, slipped 1.6% to HK$302.60.

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