HSI falls as Asian investors run for cover - RTHK
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HSI falls as Asian investors run for cover

2020-02-26 HKT 16:38
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  • Coronavirus fears continued to dominate market sentiments. Photo: AP
    Coronavirus fears continued to dominate market sentiments. Photo: AP
Hong Kong stocks ended sharply lower again on Wednesday, in line with a worldwide plunge as the extensive spread of the coronavirus fans fears about a severe hit to the global economy.

The Hang Seng Index retreated 0.7 percent, to close at 26,696.

On the mainland, the Shanghai Composite Index fell 0.8 percent, to 2,987 while the Shenzhen Composite Index fell 2.7 percent, to 1,890.

There was heavy selling across the region, after a day of relative calm caused by bargain-buying, followed another rout on Wall Street where all three main indexes lost around 3 percent.

Tokyo ended down 0.8 percent, as bargain hunters and a rising yen helped the index pare some losses.

Sydney shed more than 2 percent, while Seoul, Singapore, Wellington and Jakarta were all down more than 1 percent. Manila tumbled almost 4 percent as it resumed trading after a one-day holiday. Taipei and Bangkok were also well down.

However, the US dollar was being kept in check by speculation the Federal Reserve could cut interest rates to support markets, though for now officials are saying the US economy remains in rude health.

Oil prices were down again after three days of steep losses that have wiped about 7 percent off both main contracts, although observers warn the virus's spread to the giant US economy could deal it further pain.

The VIX "fear" index is at its highest level in more than a year, though gold, usually a main target for those seeking shelter from the turmoil, was subdued, with analysts suggesting this could be down to traders cashing out to cover equity margin calls.

"To suggest the market is a tad skittish over the coronavirus becoming a pandemic could very well be the understatement of the century with the virus morphing into the market's biggest macro worry of the decade," said AxiCorp's Stephen Innes.

Still, Gorilla Trades strategist Ken Berman added: "In light of the quick spreading of the virus, the global economy is likely to suffer, at least, a short-term shock, but should the outbreak slow down during the spring, we could see a swift economic recovery." (AFP)