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Nikkei Markets

Hong Kong stocks halt US stimulus-driven advances

China Life rises, but Beigene after drug suspended

HONG KONG (Nikkei Markets) -- Hong Kong stocks retreated on Thursday following two days of gains spurred by economic stimulus in the U.S., with investors staying cautious over the impact of the new coronavirus on the world.

The Hang Seng Index ended 0.7% lower at 23,352.34. U.K.-headquartered lender HSBC Holdings slid 1.3% and Industrial & Commercial Bank of China lost 1.7%, while diversified Chinese conglomerate CITIC shed 5.7%.

The 50-stock index rose 4.5% on Tuesday and 3.8% on Wednesday, aided by the U.S. Federal Reserve's announcement it was willing to buy unlimited government-backed debt and also purchase corporate bonds to cushion the impact of the coronavirus.

The measures were on top of two unscheduled interest-rate cuts recently. Additionally, the U.S. Senate on Wednesday approved an unprecedented $2 trillion emergency aid package.

"Despite the stimulus packages, the market is still jittery," said Kevin Leung, executive director for investment strategy at Haitong International Securities. "We have seen the trough for China and Hong Kong, but the U.S. is nowhere near a trough in terms of valuations. So the risk is a bit higher."

Several other global authorities have also announced their own stimulus measures in recent days to help their economies endure the coronavirus outbreak, which has infected nearly 450,000 people and killed more than 20,000 around the world so far.

Luca Paolini, chief strategist at Pictet Asset Management, wrote in a note that the market was "pricing in a crisis somewhere in between global financial crisis and the Great Depression," and that the money manager was still cautious on risk assets in the short-term on the prospect of "more bad news coming up."

In the mainland, the Shanghai Composite Index slipped 0.6%, while the yuan traded onshore strengthened 0.3% to 7.0906 against the U.S. dollar.

Some large companies that reported earnings during the midday break on Thursday retreated amid broad market weakness and concerns over the business outlook despite posting an increase in their 2019 profits.

Personal-hygiene products maker Hengan International Group slid 2.8% despite saying its profit grew 2.8% last year on higher sales and improved gross profit margins.

China Overseas Land & Investment shed 2.3% even as last year's net profit increased 10.3% amid higher revenue from property development.

China Resources Land slumped 5% in spite of an 18.3% increase in annual profit, fueled by gains on revaluation of its investment properties.

Shares of biopharmaceutical company Beigene tumbled 5.6% after the China National Medical Products Administration suspended the import, sale and use of cancer drug Abraxane following an inspection at a contract manufacturing facility in the U.S.

China All Access Holdings slid 6.3% after the communication services provider said its 2019 loss was expected to have widened from the year before.

Huadian Power International advanced 2.9% after saying its 2019 net profit more than doubled from the year before.

CGN Power added 1.8% following an 8.8% increase in its profit last year.

-- Benny Kung

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