Hong Kong stocks slip as worsening Covid-19 stokes lockdown fears while Russia-Ukraine tensions dent risk appetite, fan rally in crude oil

  • Hang Seng heads for the biggest drop in two weeks as Covid-19, Ukraine tensions zap global risk appetite
  • Alibaba slips on first day of trading after announcing the date for its next quarterly earnings release while oil stocks rally on supply outlook

Hong Kong stocks fell by the most in two weeks on global risk aversion as the fifth wave of Covid-19 infections in the city worsened and the US warned Russia could invade Ukraine at any time in the coming week. Crude oil rally aided producers.

The Hang Seng Index slipped 1.3 per cent to 24,594.21 at the local noon trading break, a second day of loss. The Tech Index retreated 1.7 per cent while China’s Shanghai Composite Index declined 0.6 per cent.

Alibaba Group Holding, the owner of this newspaper, declined 2.7 per cent to HK$119.10 as the e-commerce group prepares to report its third-quarter earnings on February 24. Meituan tumbled 3.2 per cent and Tencent Holdings slid 1.3 per cent. NetEase and JD.com sank by more than 3 per cent.

Despite recent gains, the Hang Seng “remains plagued by Russia-Ukraine tensions this week and is expected to fluctuate,” Eric Chong, research manager at Chief Group in Hong Kong, said in a note on Monday.

The US has warned that Russia could attack Ukraine at any time before the end of the Winter Olympics, which concludes in Beijing on February 20. The tensions sparked concerns about supply bottlenecks, fanning a rally in crude to US$94.64 a barrel, the highest since September 2014.

PetroChina gained 3.1 per cent to reach the highest since September 2019. CNOOC rose 1.5 per cent to its one-year high.

Major markets in the Asia-Pacific region saw steep losses with benchmarks in Japan and South Korea sinking by more than 1.6 per cent while Australian equities were little changed.

Hong Kong saw a record of more than 6,500 cases last week versus 1,042 in the preceding week, prompting officials to consider tougher measures including possible rolling“district lockdowns to control the outbreak and conduct mass screening.

Elsewhere, Contemporary Amperex jumped 4 per cent in Shenzhen, the most in a month, after the Chinese electric-car battery maker filed a police report over the weekend to counter “vile rumours” about its business, including removal from the ChiNext index and a breakdown in talks with its client Tesla.

CATL crashed 17 per cent last week, the most in a year. Its slump since late last year was the biggest drag on the CSI300 as the local benchmark plunged into bear market last month.

Author: Cheryl Heng, SCMP

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