HK stocks tank on virus fear but most of Asia bounces

30-Jan-2020 Intellasia | AFP | 6:02 AM Print This Post

European stock markets recovered further Wednesday, as positive Apple earnings and US data offset concerns over the spreading coronavirus that has caused airlines to suspended flights to and from China.

Hong Kong’s main stocks index slumped 2.8 percent by the close as traders returning from the Lunar New Year break played catch-up with the global selloff triggered by the epidemic.

The dollar largely firmed, while oil prices jumped nearly one percent.

“Risk sentiment is being given some reprieve from concerns over the novel coronavirus outbreak,” said Han Tan, market analyst at FXTM.

“The positive surprise in Apple’s latest earnings overnight and Tuesday’s better-than-expected US consumer confidence reading… served as distractions from the coronavirus gloom that has beset investors.”

Apple on Tuesday posted record results for the final three months of last year, delivered by gains in iPhone sales.

But striking a sombre tone on an earnings call, chief executive Tim Cook said the company is closely watching the viral outbreak hitting China, where Apple has customers, partners, suppliers and employees.

The outbreak meanwhile risks dealing a massive blow to China’s already-fragile economy, coming during the Lunar New Year holidays when millions criss-cross the country and spend billions.

A number of airlines have decided to temporarily halt or reduce flights to China as the country struggles to contain the spread of the virus.

British Airways on Wednesday said it had suspended all its flights to and from mainland China following UK government advice against all but essential travel to the country.

Indonesia’s Lion Air Group said it was doing the same, while Russia’s Urals Airlines said it was cutting some services to Europe popular with Chinese tourists, including Paris and Rome.

China has advised its citizens to postpone trips abroad and cancelled overseas group tours, while several countries have urged their citizens to avoid travel to the Asian country.

“Markets will remain very volatile due to the (virus) uncertainty, and the swings won’t subside until we have clear evidence that the virus is fading,” said Banny Lam at CEB International Investment.

Investors were handed some cheer from US data showing healthy consumer activity, a pick-up in consumer confidence and a recovery in the key manufacturing sector.

The Federal Reserve’s policy meeting Wednesday is expected to see US interest rates on hold.

Key figures around 1145 GMT

London FTSE 100: UP 0.2 percent at 7,493.19 points

Frankfurt DAX 30: UP 0.1 percent at 13,331.14

Paris CAC 40: UP 0.4 percent at 5,946.65

euro O STOXX 50: UP 0.3 percent at 3,729.28

Hong Kong Hang Seng: DOWN 2.8 percent at 27,160.63 (close)

Tokyo Nikkei 225: UP 0.7 percent at 23,379.40 (close)

Shanghai Composite: Closed for a public holiday

New York DOW: UP 0.7 percent at 28,722.85 (close)

euro/dollar: DOWN at $1.1003 from $1.1022 at 2200 GMT

Pound/dollar: DOWN at $1.3012 from $1.3028

euro/pound: DOWN at 84.56 pence from 84.61 pence

Dollar/yen: DOWN at 109.07 yen from 109.15 yen

Brent Crude: UP 0.8 percent at $59.97 per barrel

West Texas Intermediate: UP 0.7 percent at $53.87 per barrel–finance.html


Category: Hong Kong

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