Coronavirus spike ends five-day Hong Kong rally

Business | Agencies and Stella Zhai 8 Jul 2020

The Hong Kong stock market ended a five-day rally amid worries of a spike in coronavirus cases, recording a turnover of HK$240 billion, while mainland equities rose.

The Hang Seng Index fell 1.38 percent, or 363 points to 25,975 points yesterday, but turnover remained above HK$200 billion for a second day, dropping only 4 percent from Monday.

Chinese chipmaker Semiconductor Manufacturing International Corp (0981) was the most traded stock, with a turnover of HK$16.3 billion.

However, its shares fell 8.8 percent to HK$36.55 after hitting a record high of HK$44.50. The fall was attributed to market worries on SMIC's ties with Huawei, which is being sidelined by France, though Deutsche Telekom has boosted relations with the firm.

Local property developers, retail, and casino stocks led the blue-chip losses as Hong Kong reported new Covid-19 cases, with Wharf Real Estate Investment Company (1997) falling 5.68 percent to HK$35.70. Sands China (1928) fell 4.16 percent to HK$31.10.

Hong Kong Exchanges and Clearing (0388) also decreased after touching HK$360, closing 1.58 percent lower at HK$347.80. Tencent (0700) closed 0.77 percent lower at HK$516.

Geely Automobile (0175) gained the most among index constituents, rising 3.29 percent to HK$16.94.

Shares of Citic Resources (1205) surged 17.24 percent to HK$0.34 after the company announced it is in talks with potential investors to sell its equity interests in Citic Dameng (1091). Citic Dameng increased by 43.44 percent.

The mainland blue-chip CSI 300 index rose for a sixth straight day to close at 4,698.13 points, its highest since June 25, 2015, as retail investors rushed to join an officially sanctioned bull market. But stocks pared gains late in the day as some traders booked profits.

Mainland investors have pushed outstanding margin debt on domestic exchanges to more than 1.2 trillion yuan as of Monday, Bloomberg data showed. The figure rose 36.7 billion yuan from July 3, the biggest increase since January 2015.

Elsewhere, the onshore yuan was at 7.0241 per US dollar, the strongest since mid-March.

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