Hong Kong and other major Asia-Pacific stocks slid on Friday, as investors continued to balance fears of rising coronavirus cases in the city, the US and elsewhere against signs of China’s steady economic recovery and the huge amount of liquidity around the globe.
The Hang Seng Index closed down 1.8 per cent. That was its worst daily decline in nearly four weeks. But it managed to post a 1.4 per cent weekly gain, its second straight weekly advance.
Information technology stocks led losses, with smartphone lens-maker Sunny Optical falling as much as 6.9 per cent before narrowing the loss to 4 per cent. It had risen in 10 of the previous 12 sessions.
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Of the benchmark’s 50 constituent members, 43 showed losses.
Profit taking set in after some spectacular gains by large caps in recent sessions, and sentiment was also weighed down by moves by China to cool the exuberance that has been taking hold over mainland stocks.
China Life Insurance Co., a Chinese auto-to-health insurance giant, fell 6.7 per cent, after advancing on six of the previous seven sessions, including a 14.4 per cent gain on Monday. Geely Automobile led gainers on the index, shooting up as much as 6.3 per cent before trimming back to a 3.9 per cent advance. It had risen in five of the previous six sessions, including nearly 16 per cent on Monday, as the China Association of Automobile Manufacturers said vehicle makers could recover faster than expected.
Hong Kong saw seven companies debut on its main board, tying for second place as the most stocks traded in one day in the city. The stampede of IPOs is boosting the mood of bullish traders who see the rush as among signs of confidence in the city despite Beijing’s tightening grip.
The benchmark is on track to post its second-straight week of gains.
Ophthalmic therapy provider OcuMension Therapeutics ended up 152 per cent. It was oversubscribed 1,896 times.
Alibaba, the Chinese e-commerce giant and owner of the South China Morning Post, fell 2.4 per cent to HK$255.40 as profit taking set in. On Thursday, it surged 10 per cent in Hong Kong, its biggest one-day gain since its secondary listing in the city last November that pushed it to overtake Facebook as the world’s sixth-most valuable company.
The Hang Seng benchmark stampeded into a bull market on Monday, after being in bear territory for more than three months as the local economy remains mired in recession amid the coronavirus pandemic. A third wave of Covid-19, with the number of local coronavirus cases hitting a record daily high of 34 on Thursday, is sparking new measures to contain its spread.
The US continues to be under siege by the virus, with deaths nearing 133,000 and more states imposing restrictions amid a surge in new infections. US jobless claims released overnight fell to 1.3 million – a four-month low – but more than 50 million claims have been filed since the coronavirus exploded in the world’s largest economy in mid-March.
“Covid-19 will hum in the background for the foreseeable future. Even if industrial shutdowns and more lockdowns have been discarded as a policy option, that does not necessarily mean consumer behaviour will not change,” said Stephen Innes, chief global market strategist at AxiCorp.
Meanwhile, US-China tensions continue to worsen, with the US sanctions Chinese government officials over the treatment of Uygurs in Xinjiang.
The Shanghai Composite Index closed down 2 per cent, after eight sessions of gains. It posted a big 7.3 per cent advance for the week, in what was its four straight week of gains.
Stocks in China have been on fire of late, leading to worries a bubble could be forming and prompting the government to step in with a number of cooling measures.
China’s state funds have announced plans to divest some stakes, in a sign that the recent addition of about US$1 trillion to stock values may be peaking.
The National Council for Social Security Fund, with about 2.2 trillion yuan (US$314 billion) in assets, said it is selling a 2 per cent stake in People’s Insurance Company Group of China, according to a Thursday filing. The National Integrated Circuit Industry Investment Fund, also dubbed the Big Fund for its role in fostering China’s semiconductor industry, said it plans to sell shares of textile maker Wuxi Taiji Industry, Shenzhen Goodix Technology and Beijing BDStar Navigation.
PICC’s Hong Kong shares plunged by as much as 9.3 per cent to HK$2.74, and closed down 7.4 per cent to 7.64 yuan in Shanghai. Shares of Wuxi Taiji retraced by 4.4 per cent to 13.35 yuan, Shenzhen Goodix gave up 3.9 per cent to 259.47 yuan in Shanghai while BDStar Navigation fell 4.7 per cent to 37.40 yuan on the Shenzhen exchange.
Kweichow Moutai, one of the heaviest traded companies on the Stock Connect trading link, closed with a 0.5 per cent gain at 1,713.85 yuan, staying above the 1,700-yuan mark for a second session. The stock has soared about 44 per cent this year.
Three IPOs debuted on the Chinese markets, with one rising more than 468 per cent.
Hardware and software developer Jiangsu Yunyong Electronics gained 468.1 per cent to 252.61 yuan from its listing price of 44.47 yuan in Shanghai, while Chinese drug developer Hainan Huluwa Pharmaceutical advanced 43.9 per cent to 7.47 yuan from its listing price of 5.19 yuan.
Container product manufacturer Zhejiang Jinsheng New Materials rose 44 per cent to 20.15 yuan from its listing price of 13.99 yuan in Shenzhen.
Elsewhere in Asia, Japan’s Nikkei fell 1 per cent, South Korea’s Kospi declined 0.8 per cent, and Australia’s S&P/ASX 200 slipped 0.6 per cent.
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This article Hong Kong stocks slide but post second straight weekly gain, as coronavirus weighs on sentiment first appeared on South China Morning Post