Hong Kong Market tanks 4%

Headline indices of the Hong Kong stock market finished steep lower on Monday, 16 March 2020, amid deepening concerns over economic impact of coronavirus on the world's second-largest economy industrial output and retail sales numbers showing the worst drops in activity on record and a second emergency rate cut by the U.S. Federal Reserve. Sell-off was across the board, with IT stocks leading the decline. At closing bell, the benchmark Hang Seng Index dropped 4.03%, or 969.34 points, to 23,063.57. The Hang Seng China Enterprises Index slipped 4.38%, or 422.55 points, to 9,227.60.

The sell-off comes after the U.S. Federal Reserve and its global counterparts moved aggressively with sweeping emergency rate cuts in a bid to combat the pandemic underscored just how much damage the coronavirus outbreak had already done to the global economy.

The Fed's emergency 100 basis point rate cut on Sunday was followed on Monday by further policy easing from the Bank of Japan in the form of a pledge to ramp up purchases of exchange-traded funds and other risky assets. New Zealand's central bank also shocked by cutting rates 75 basis points to 0.25%, while the Reserve Bank of Australia (RBA) pumped more money into its financial system. South Korea cut rates and Russia rushed together a $4 billion anti-crisis fund. The Hong Kong Monetary Authority lowered its base rate charged through the overnight discount window to 0.86%.

The People's Bank of China offered CNY 100 billion or $14.3 billion into the financial system via one-year medium-term lending facility on Monday. But the bank kept the rate at 3.15 percent. China's central bank added more funds into the banking system but kept its borrowing cost unchanged after the US Federal Reserve unexpectedly reduced the interest rate by 100 basis points. The central bank last week had reduced the reserve requirement ratio by 50-100 basis points for qualifying banks to shore up the economy hit by the outbreak of covid-19. This was the second cut in RRR this year.

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