HK and China stocks swing as traders weigh growth outlook and pandemic resurgence

24-Sep-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

Hong Kong and China stocks swung between gains and losses, as traders assessed prospects of global growth and the fallout from a resurgence in the coronavirus epidemic in Europe.

The Hang Seng Index dropped 0.4 per cent, or 89.18 points, to 23,627.67 after rising as much as 0.3 per cent in morning trading on Wednesday. The benchmark dropped 3 per cent over the past two days. The mainland’s Shanghai Composite Index rose less than 0.1 per cent.

HSBC tumbled for third day, taking the London-based bank to its lowest level in 25 years and Joy Spreader Interactive Technology, one of Hong Kong’s most sought-after initial public offerings, dropped below the offer price on debut.

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Most equity gauges in Asia retreated except Australia, after the Federal Reserve chair Jerome Powell said that the US economy has a long way before it fully recovers from the damage of Covid-19 and will need more support. Meanwhile, the UK imposed new lockdown measures that are likely to last six months, with prime minister Boris Johnson urging people to work from home if possible. In overnight trading, US stocks reversed an earlier sell-off to end higher as bargain hunters piled into retailer and tech stocks on the dip, taking advantage of a rout on Monday.

“After the Monday meltdown across most global equities, there is a temporary sense of calm enveloping the global stock markets,” said Stephen Innes, a strategist at AxiCorp. “Although the central banks can do more, equity markets have likely reached their multiple policy deluges’ saturation point.”

In a further sign of frayed relations between the US and China, President Donald Trump and his Chinese counterpart Xi Jinping clashed during a virtual United Nations general Assembly, bickering over issues from ocean pollution to the coronavirus pandemic. HSBC slid 3.3 per cent to HK$27.75, heading for its lowest close since May 1995, on concern that it will face sanctions by China for assisting the US in probes into Huawei Technologies. The stock has lost 54 per cent this year on slumping profits amid the dislocation by Covid-19.

Joy Spreader dropped by as much as 6.3 per cent from its offer price to HK$2.70 on the first day of trading. The retail portion of its IPO was more than 1,600 times oversubscribed, making it the third most popular offering this year. The stock rose 0.4 per cent to HK$2.89 in late morning trading.

On the mainland, two IPOs debuted on the Shenzhen exchange and both rose by the daily limit. Beijing ZZNode Technologies, whose businesses range from software development to systems integration, surged by 44 per cent from the offer price to 33.70 yuan, while Xuchang KETOP Testing Research Institute, which offers industrial testing services, also rose by the same magnitude to 43.80 yuan.

Huayi Brothers Media sank 5.1 per cent to 5.04 yuan in Shenzhen after two owners of the filmmaker said they plan to sell no more than a 3 per cent stake in the company to repay stock pledges.


Category: Hong Kong

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