Hong Kong Market tumbles after Moody's fresh downgrade, coronavirus woes

Headline indices of the Hong Kong stock market finished session steep lower on Tuesday, 21 January 2020, as risk aversion selloff triggered across the board on deepening fears over the outbreak of a new pneumonia coronavirus in mainland China, after the country confirmed the first person-to-person spread of a new virus in central city of Wuhan, which has killed four people so far. Meanwhile, a downgrade of Hong Kong's rating by credit rating agency Moody's on Monday also weighed on blue-chip stocks. At closing bell, the benchmark Hang Seng Index tumbled 2.81%, or 810.58 points, to 27,985.33. The Hang Seng China Enterprises Index was down 3.2%, or 361.36 points, to 10,970.13.

Market commenced trading with a back foot amid increasing concerns over a new strain of coronavirus after the country confirmed the first person-to-person spread of a new virus in central city of Wuhan, which has killed four people so far. A new coronavirus has spread from the central city of Wuhan to cities including Beijing and Shanghai, with more than 200 cases reported so far. Four cases have been reported outside China - in South Korea, Thailand and Japan.

Moody's Investors Service has downgraded the city's rating amid concerns about a failure to address political, economic and social concerns in wake of the protests there.

Blue-chip stocks suffered heavy losses as investors took profits ahead of Lunar New Year, which this year will be haunted by the outbreak of a new coronavirus in China. Gaming giant Tencent Holdings (0700 HK) plunged by 2.7% to HK$385.4, while insurer AIA Group (1299 HK) softened 3.4% to HK$81.85.

Aviation counters were badly hurt, amid concerns that a viral outbreak would deter air travel just as China is in the early days of its annual Lunar New Year holiday, when an estimated 3 billion trips will be made over a 40-day holiday period ending on February 18. That includes 450 million trips by Chinese tourists to such favourite destinations as Bangkok, Seoul, Osaka and Tokyo. China Southern Airlines (01055) dived 6.5% to HK$4.74. China Eastern Airlines (00670) plunged 6.7% to HK$3.76. Air China (00753) slid 5.9% to HK$6.81. Cathay Pacific (00293) sank 4.1% to HK$10.38.

Powered by Capital Market - Live News