Hong Kong stocks dip amid global volatility

0 Comment(s)Print E-mail Xinhua, March 14, 2020
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Hong Kong stocks reported mild losses on Friday despite sharp falls of other major markets worldwide after spreading coronavirus plus falling oil prices dampened investors' confidence in the global economy.

Although plunging at opening, the Hang Seng Index finished the day 1.14 percent lower at 24,032.91 points, outperforming most of global indices including Tokyo's benchmark Nikkei, which nosedived more than 6 percent. However, it still sank to the weakest level in over three years when starting the morning session 7.36 percent lower.

Hong Kong stocks were largely on a losing streak over past days, except for a brief rebound on Tuesday, ending the whole week about 8 percent lower.

The sluggish trend followed tumbling global markets after oil prices plummeted on the failure of main crude producing countries including Saudi Arabia and Russia to strike a deal about production cuts.

Intensifying coronavirus fears exacerbated sell-off of equities across the global market, with Wall Street on Thursday witnessing a historic nosedive in its worst session since 1987.

Thanks to southbound funds from the mainland, the Hong Kong market appeared to be less vulnerable amid the current global volatility, observers said. Net inflows of mainland capital via stock connect programs totaled more than 16 billion Hong Kong dollars (about 2 billion U.S. dollars) on Friday, substantially higher than the daily average in 2019.

Yang Yuchuan with Prime China Securities said the capital influx eased downward pressures on Hong Kong stocks and showed the confidence of investors.

While the novel coronavirus is spreading rapidly globally, China has made progress in its anti-epidemic fight and has a relatively positive economic outlook, which held the A shares relatively stable and became a supportive factor for the Hong Kong market, said Su Jie, a researcher of Bank of China (Hong Kong).

Multiple Hong Kong-listed bluechips returned to positive territory on Friday. Oil giant CNOOC rose 1.54 percent, e-commerce giant Alibaba climbed 1.54 percent, and leading insurer AIA Group gained 0.44 percent.

Responding to market fluctuations, the office of the financial secretary of the Hong Kong Special Administrative Region government said Friday in a statement that stock, futures and derivatives market performed normally, with no uncommon deals found, and the Securities and Futures Commission will continue to closely monitor the market, assess underlying systemic risks and take appropriate measures when necessary.

Hong Kong Securities Clearing Company had decided on Thursday to raise the margin rate for stock and futures markets to step up risk management, according to the statement.

The office stressed that Hong Kong's foreign exchange and monetary markets have also remained stable. The capital adequacy ratio of Hong Kong's banking system stays above 20 percent and the liquidity coverage ratio stands at over 150 percent.

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