HKEX, Sands China lead losses in Hong Kong as Covid-19 flare-up dents recovery bets while Ganfeng slides on insider trading probe

  • Hang Seng Index is headed for a third day of decline, the longest losing streak in three weeks as trading resumes after a holiday
  • Ganfeng Lithium sinks following a disclosure the company is facing an insider-trading probe

Hong Kong stocks fell for a third day as Covid-19 cases in mainland China flared up just as measures were being eased, prompting traders to scale back bets on the nation’s economic recovery momentum. Ganfeng Lithium sank on an insider-trading probe.

The Hang Seng Index slipped 0.6 per cent to 21,730.54 at the noon break. The Hang Seng Tech Index lost 0.4 per cent, while the Shanghai Composite Index added 0.1 per cent.

The city’s market resumed trading after a holiday on Friday for the 25th anniversary of the handover. A three-day decline would be the longest losing run in three weeks.

Bourse operator Hong Kong Exchanges and Clearing led losses, falling 3.7 per cent to HK$371.60. Macau casino concessionaire Sands China retreated 2.4 per cent to HK$18.28 on concerns about citywide lockdown. Developer Country Garden Holdings slid 2.3 per cent to HK$4.75.

The eastern province of Anhui reported 287 new infections on Sunday, leading to a lockdown of two counties while Shanghai added three cases, according to the authorities. Macau, which reported its first two Covid-related deaths on Sunday, said that it would not rule out locking down the entire city if current measures fail to prevent transmission.

The latest setback is a hiccup to a rally in the Hang Seng Index, which has risen 19 per cent from a six-year low in mid-March. The rebound added US$600 billion of market value, aided by the end of a two-month lockdown in Shanghai and other policy stimulus.

“We expect policymakers to maintain the ‘dynamic zero Covid’ policy stance until the second quarter next year, although uncertainty is significant,” Goldman Sachs said in a research note. “The imbalances between different consumption activities might continue. Consumption activity in the education and entertainment sectors has been the most depressed and was almost 20 per cent below trend level.”

The Tracker Fund lost 0.4 per cent to HK$22.20 and CSOP Hang Seng Tech Index ETF slipped 0.3 per cent to HK$4.79.

Mainland traders can now buy four Hong Kong-listed exchange-traded funds (ETFs) via the Stock Connect from today after regulators on both sides expanded the cross-border trading link. Meanwhile, overseas traders can access 83 mainland-based EFTs with total assets of about US$90 billion.

Ganfeng Lithium tumbled 4.1 per cent to HK$82.85 after saying that it was facing an investigation for suspected insider trading. China’s market regulator in January started probing its buying and selling of an undisclosed listed stock, the company said in a filing on Sunday. Its share slipped 2.4 per cent to 109.26 yuan in Shenzhen.

OneConnect Financial Technology, a Ping An Insurance-backed unit that offers cloud data services to financial institutions, traded at HK$5.37 on the first day of trading in Hong Kong. It achieved the listing status through way of introduction.

Author: Zhang Shidong, SCMP

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