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Nikkei Markets

Hong Kong shares slide as coronavirus spreads in US and Europe

ICBC advances after Chinese banking giant reports 4.9% increase in 2019 profit

HONG KONG (Nikkei Markets) -- Hong Kong shares headed lower on Monday as a surge in the number of people infected and deaths from the coronavirus outbreak in Europe and the U.S. escalated fears about a global recession.

The Hang Seng Index lost 1.3% to 23,181.07 by noon. Heavyweights Tencent Holdings and HSBC Holdings decreased 2.3% and 1.4%, respectively, contributing most to the index's losses by points. Geely Automobile Holdings declined 3.6% ahead of its earnings announcement. During the break, the automaker reported a 34.7% drop in 2019 net profit.

Industrial & Commercial Bank of China rose 1% after China's largest lender late on Friday reported a 4.9% increase in net profit for last year.

Equity indexes on Wall Street snapped a three-day winning streak on Friday as worries over the impact of the coronavirus pandemic grew even as the U.S. approved a $2.2 trillion aid package. The U.S. had over 136,000 confirmed cases of people infected with the virus by Sunday, while Italy had nearly 100,000 cases and Spain about 79,000. Fatalities also rose in the three countries, with the death toll in Italy climbing over 10,000. Meanwhile, confirmed cases in mainland China continued to hover around 81,000, with about 3,300 deaths.

Shares in Hong Kong were likely to be more stable than those in the U.S. because the situation in China appeared to be under control and as Beijing was encouraging pension and public funds to enter the market, said Mila Yuen, assistant vice president at Mason Securities.

She said that record high inflows into the Hong Kong stock market from mainland China via the electronic links connecting the exchanges in the two places could help stabilize the local market.

By noon, mainland investors had used up more than 2 billion yuan ($281.8 million) of their daily quota of purchases in Hong Kong via the stock exchanges in Shanghai and Shenzhen. Turnover on the Hong Kong Stock Exchange's main board was at 57.58 billion Hong Kong dollars ($7.43 billion).

In the mainland, the Shanghai Composite Index fell 1.6%, while the yuan traded onshore was little changed against the dollar at 7.0928.

Vitasoy International Holdings slumped 11.4% in Hong Kong after saying it expects net profit for the year ending March 31 to fall 25% to 35% from a year ago.

Fuyao Glass Industry fell 5.4% after reporting a 30% decline in last year's profit.

China Merchants Land surged 9.7% following a 47% surge in full-year net profit. Revenue for the year jumped 62.6% from a year ago.

-- Benny Kung

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