Hong Kong Stocks Tank On Virus Fear But Most Of Asia Bounces

(@ChaudhryMAli88)

Hong Kong stocks tank on virus fear but most of Asia bounces

Hong Kong, (UrduPoint / Pakistan Point News - 29th Jan, 2020 ) :Hong Kong stocks plunged Wednesday as investors in the city returned from their Lunar New Year break to a global panic over the deadly coronavirus, though most other Asian markets were lifted by bargain-buying after recent losses.

Healthy US data reinforced hopes for the global economic outlook and supported a rally across US and European markets, which provided a strong lead for Asia, while a record earnings report from Apple also helped the mood.

Still, the focus remains on developments in the virus outbreak -- which has now killed at least 132 people and infected more people in China than SARS did 17 years ago -- and concerns about the impact on the world economy.

Among the worst-hit sectors on global trading floors are firms linked to travel and tourism, as big-spending Chinese tourists stay at home with Beijing clamping down on people's movement.

The outbreak carries echoes of the SARS crisis, which paralysed regional travel and battered local economies. Chinese tourist numbers then fell by around a third.

The latest outbreak is expected to deal a massive blow to China's already-fragile economy, coming during the Lunar New Year holidays when millions criss-cross the country and spend billions of Dollars. It also comes just as data indicated some sort of stability in the economy after a long-running slowdown.

"We expected to see strong economic momentum in China before, but now the pace of growth may slow," Banny Lam, at CEB International Investment, said.

"Markets will remain very volatile due to the uncertainty, and the swings won't subside until we have clear evidence that the virus is fading. That may happen when the weather gets warmer in the summer." Hong Kong fell 2.6 percent as stocks dropped across the board, with airline Cathay Pacific losing more than three percent, casino operator Galaxy Entertainment diving more than six percent and property giant New World Development off more than four percent.

- 'Positive outlook' - However, markets elsewhere in the region enjoyed a bounce with Tokyo ending up 0.7 percent, Sydney adding 0.

5 percent, Seoul climbing 0.7 percent and Jakarta 0.2 percent higher.

Mumbai, Bangkok and Singapore were also up though there were dips in Wellington and Manila. Mainland markets' Lunar New Year break, which was due to end Thursday, has been extended until Monday.

Investors were given some cheer by figures from Washington showing healthy consumer activity, a pick-up in consumer confidence and a recovery in the key manufacturing sector. The readings support recent optimism that the world economy is stirring.

"We are seeing economic data points that support this continued recovery," Susan Schmidt, a fund manager at Aviva Investors, told Bloomberg tv.

"The coronavirus might have tamped that down just a bit, but overall management teams are coming back and giving a pretty positive outlook and feeling confident about their businesses." Next up is the Federal Reserve's policy meeting later in the day, which is expected to see it keep interest rates on hold, though its comments on the impact of the virus will be closely followed.

The upbeat mood helped higher-yielding, riskier currencies rise against the dollar, with the Mexican peso, Chinese Yuan and Australian Dollar making inroads.

Oil was also higher, with OANDA's Edward Moya saying in a note that coronavirus fears have scaled back slightly, while a drop in US stockpiles also provided a boost.

"prices are recovering, and we could see this rebound continue as supply risks remain in Libya and as US production shows signs of slowing down," he said.

- Key figures around 0610 GMT - Hong Kong - Hang Seng: DOWN 2.4 percent at 27,275.45 Tokyo - Nikkei 225: UP 0.7 percent at 23,379.40 (close) Shanghai - Composite: Closed for a public holiday Dollar/yen: UP at 109.15 Yen from 109.12 yen at 2200 GMT Euro/dollar: DOWN at $1.1012 from $1.1021 Pound/dollar: DOWN at $1.3021 from $1.3025 Euro/pound: UP at 84.60 pence from 84.58 pence Brent Crude: UP 1.3 percent at $59.57 per barrel West Texas Intermediate: UP 1.3 percent at $54.16New York - DOW: UP 0.7 percent at 28,722.85 (close)London - FTSE 100: UP 0.9 percent at 7,480.69 (close)