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Nikkei Markets

Hong Kong shares slip as coronavirus toll surpasses SARS

Tencent asks employees to work from home until Feb. 24

HONG KONG (Nikkei Markets) -- Hong Kong shares declined on Monday as investor sentiment remained jittery after the death toll from the new coronavirus surpassed that of the 2003 outbreak of the severe acute respiratory syndrome, or SARS, epidemic.

The Hang Seng Index slipped 0.8% to 27,193.17 by noon. Internet services company Tencent Holdings fell 0.8%. The company has asked its employees to continue working from home until Feb. 24, instead of Feb. 1, according to a statement on its official WeChat account. Among other heavyweights, AIA Group and China Construction Bank dropped 1.8% and 1%, respectively.

Equity markets across the region traded lower as concerns over the virus outbreak in and around China lingered. The death toll from the coronavirus outbreak in China rose to 908 as of Sunday. China confirmed a total of 40,171 cases. So far, there have been two deaths outside of mainland China, one each in Hong Kong and the Philippines.

The number of confirmed SARS cases had totaled 8,098 over about eight months, resulting in 774 fatalities.

Still, some participants said the worst may be over for the Hang Seng Index. The index rose 4.1% last week after sliding 9.4% over the last two weeks in January.

While China is announcing new confirmed cases and fatalities, the market is not falling sharply anymore, said Jason Chan, senior manager for research department at uSMART Securities. "Markets will now focus on the development of a vaccine and central bank policies for support."

In the mainland, the Shanghai Composite Index slipped 0.4% by midday. China's retail inflation accelerated at a faster-than-expected pace in January, with the consumer price index rising 5.4% following a 4.5% gain in December, according to data released on Monday.

Economists were expecting an advance of 4.9%, according to Bloomberg.

Producer price inflation rose 0.1% after dropping 0.5% in December.

"It appears that supply disruptions and hoarding due to the coronavirus outbreak helped to keep food prices elevated during the week after Chinese New Year, when they would normally drop back," Julian Evans-Pritchard, an economist at Capital Economics, wrote in a note. "We think the People's Bank of China will focus on the risks from slower growth and factory-gate deflation rather than high consumer prices."

Restaurant operator Jiumaojiu International Holdings fell 3.9% in Hong Kong after saying it is extending a period of suspension for all its restaurants in view of the latest coronavirus developments.

China Traditional Chinese Medicine Holdings added 6.6% after saying authorities allowed certain designated hospitals to use its product Toujie Quwen Granules in the treatment of the coronavirus.

Online shopping company Hong Kong Television Network surged 23% after saying its average daily order numbers surged 64.7% in January from a year ago.

Shimao Property Holdings slipped 0.6% following an 11% drop in January contracted sales.

-- Benny Kung

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