Hong Kong stock market falls on reopen
The Hong Kong’s Hang Seng stock market index tumbled 3 per cent when it reopened on Wednesday amid fears over the economic impact of the coronavirus
Worries over the coronavirus endemic continued as Hong Kong’s Hang Seng stock market index fell 3 per cent on reopen Wednesday, with travel and casino operators being hit the hardest.
The impact of the virus was widespread as almost all the 50 Hong Kong-listed Chinese companies that make up the Hang Seng Index were in the red.
The downturn at the stock market continued as investors feared the economic impact of the coronavirus.
Travel and casino operators were hit the hardest as traders assess the economic impact of the deadly virus.
Among casino-related companies, Sands China was one of the biggest fallers on the Hang Seng Index as it fell by up to 6 per cent. It is a subsidiary of Las Vegas Sands and has a casino in Macau, a popular destination for mainland Chinese tourists.
Airlines, hotel operators and casinos were the first to be affected as this is usually a busy festive period which sees a lot of travel-related activity that has been affected by the virus outbreak as Chinese travellers stayed at home due to restrictions on travel.
The deadly coronavirus outbreak has reached global proportions, with cases being detected at places such as the U.S., Canada, Asia and Europe. It has already claimed more than 130 lives with more than 9,000 suspected cases undergoing treatment.
The Shanghai and Shenzhen stock exchanges, China’s main stock markets, are closed for now as Chinese authorities have extended the Lunar New Year break amid the coronavirus outbreak. They are scheduled to reopen on 3 February.
Other stock markets around Asia saw more upbeat trading having already taken a hit from negative investor sentiment earlier in the week.
However, the Hang Seng recovered to some extend by midday.
The virus is having a widespread effect, with its impact being seed beyond the stock market, spilling over to overall business, as businesses remain closed until at least 9 February following government orders.
The impact of the virus is now being felt on the overall Chinese economy, from manufacturing through to retailers. Foreign firms are also worried about the effects on their Chinese operations.
Starbucks has announced that it is temporarily closing around 2,000 stores in China to protect staff and help contain the virus. McDonald’s is also closing restaurants in five Chinese cities and introducing new health protocols.