HSI slides as airlines, casino stocks fall sharply - RTHK

Monday 24th February 2020

Hong Kong suffered more big losses on Monday as investors fret that the coronavirus could become a global pandemic, with energy firms and companies linked to tourism among the worst hit.

The Hang Seng Index fell 1.8 percent, over 487 points, to close at 26,820.

On the mainland, the Shanghai Composite Index slipped 0.3 percent, to 3,031. But the Shenzhen Composite Index rose 1.4 percent, helped by government pledges of support for businesses and stimulus measures including an interest rate cut.

Seoul led a sharp drop across Asian equity markets on Monday as South Korea announced a surge in Covid-19 infections, while oil plunged and safe-haven assets rallied on growing concerns about a possible pandemic.

News of the spread hammered the South Korea's Kospi, which sank almost 4 percent, with market heavyweight Samsung diving 4.1 percent. The won fell 0.9 percent and is sitting at a six-month low.

Sydney, Bangkok and Manila each dropped more than 2 percent. Taipei, Jakarta, Singapore and Wellington were all off more than 1 percent. Mumbai eased 0.8 percent with eyes on Donald Trump's visit to India.

The fear on trading floors has sent gold, a go-to asset in times of uncertainty, to a seven-year high, while high-yielding, riskier currencies including the Australian dollar and Indonesian rupiah, were well down.

Crude prices tanked on worries about plunging demand from China, which is the world's biggest importer and consumer of the commodity, sending energy firms in the region sharply lower. Both main contracts are down more than 10 percent so far this year.

"With the volatility we're seeing in the coronavirus event, that's creating angst in the market on the back of growth and demand expectations and we've seen oil prices weaken," said David Lennox at Fat Prophets. "The converse of that is the same event is carrying investors toward a safe haven play and that's gold."

Among individual stocks, travel and tourism linked firms continue to take a heavy hit with Sydney-listed Qantas plunging more than 7 percent, while in Hong Kong, Air China lost more than 6 percent and Cathay Pacific fell 1.3 percent.

Also in Hong Kong, Macau casino operators Sands China, Galaxy Entertainment and Wynn Macau were down between 1.4 and 3.8 percent. (AFP)