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Nikkei Markets

Hong Kong shares extend losses as coronavirus spreads

Ping An slips after results; insurer says impact of outbreak 'not small'

HONG KONG (Nikkei Markets) -- Hong Kong shares extended losses on Friday, as worries over the spread of the coronavirus within and outside China kept investors cautious.

The Hang Seng Index lost 0.7% to 27,408.79 by noon. Among heavyweights, Tencent Holdings and AIA Group fell 1.2% and 0.4%, respectively. Ping An Insurance Group slid 0.7% and was the third-largest contributor to the index's losses by points. The impact of the coronavirus outbreak on the performance of its life insurance business will be "not small," according to President and Co-Chief Executive Xie Yonglin.

The coronavirus outbreak, which was first detected in the central Chinese city of Wuhan in December and has so far claimed 2,247 lives globally, has already had a telling impact on the Asian economy. Investors continue to assess the longer-term impact of the outbreak, while mainland authorities have moved to support growth.

The People's Bank of China on Thursday lowered its one-year loan prime rate (LPR) by 10 basis points and its five-year LPR by five basis points, moves that followed a recent reduction to the rate on its medium-term lending facility.

China's LPR cut was less than market expectations, said Mila Yuen, assistant vice president at Mason Securities. "The market has reservations about future corporate fundamentals as companies report earnings," she said.

China on Friday reported 899 new cases of the infection, up from 349 new cases reported the day before. The death toll in China rose by 118. Meanwhile, South Korea reported 52 more cases of the infection on Friday, taking the country's total to 156. Hong Kong had 69 confirmed cases of the coronavirus as of Friday, with two fatalities.

"Even though the epidemic continues, experts estimate it could come under control in April," Yuen said.

In the mainland, the Shanghai Composite Index added 0.5% by midday, while the yuan traded onshore slipped 0.1% against the dollar to 7.0295.

AK Medical Holdings dropped 5.3% to HK$15.42 in Hong Kong after the orthopedic implants developer said it plans to raise 783.87 million Hong Kong dollars ($100.77 million) in net proceeds from a placing of 53.5 million shares at HK$15 apiece.

China Unicom (Hong Kong) slipped 0.6% after saying it lost a net of 1.19 million mobile billing subscribers in January.

China Resources Land slipped 0.8% after reporting a 32.7% decline in January gross contracted sales.

-- Benny Kung

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