Hong Kong Market extends losses

Hong Kong stock market finished session down on Tuesday, 14 December 2021, as risk aversion selloff continued amid renewed worries about the Omicron coronavirus variant after first confirmed Omicron-linked death in Britain and new coronavirus outbreak in China's eastern Zhejiang province.

Meanwhile, market sentiments were also dented on renewed concerns about liquidity crisis and debt defaults among Chinese developers and caution ahead of the Federal Reserve's money policy announcement on Wednesday.

At closing bell, the benchmark Hang Seng Index declined 1.33%, or 318.63 points, to 23,635.95. The Hang Seng China Enterprises Index dropped 1.55%, or 132.53 points, to 8,418.61.

Fears over the Omicron variant of COVID-19 were heightened after British Prime Minister Boris Johnson warned of a tidal wave of new cases, and the World Health Organization said it poses a very high global risk, with some evidence that it evades vaccine protection.

Major Chinese manufacturing province Zhejiang is also fighting its first Covid-19 cluster this year, with tens of thousands of citizens in quarantine and virus-hit areas suspending business operations amid attempts to contain a COVID-19 outbreak.

Investors are keeping a close eye on the Fed Chairman Jerome Powell policy meeting announcement for indication about quickening of its monthly bond purchase tapering program, as it seeks to combat an ongoing rise in inflation. The Fed is on Wednesday expected to signal a faster wind-down of its $120 billion a month bond buying programme in a move to fight high inflation, which could move it one step closer to raising interest rates.

Property stocks were lower on renewed concerns about liquidity crisis and debt defaults among Chinese developers after Fitch Ratings declared China Evergrande and Kaisa Group in default on December 9 when they failed to repay offshore bondholders. Country Garden Services sank 10.2%, China Resources Land slid 4.7% and China Overseas Land weakened 3.7%.

Shares of Macau casino operators suffered losses, as Fitch placed some casino concessionaires on rating watch, citing imminent regulatory risk, with Wynn Macau and MGM China plunging by more than 8.9%. Sands China slipped 6.9%, while Galaxy Entertainment declined 3.4%.

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