covid shot

Hang Seng Enters Correction as Vaccination Halt Worsens Selloff

(Bloomberg) — Hong Kong’s benchmark stock gauge slumped into a technical correction as the city’s temporary suspension of BioNTech vaccinations fueled worries over the pace of its recovery from the pandemic. The Hang Seng Index lost 2% amid a broad selloff in Asia on Wednesday, capping the fourth day of losses and taking its decline from a February 17 peak to 10%. Stocks in the commerce and industry sector and financials were the biggest losers on the gauge. All but three stocks on the measure fell. As one of Asia’s largest and most open equity markets, Hong Kong is particularly sensitive to shifts in global liquidity. Hang Seng’s recent slide has come as traders rush to sell pricey stocks amid rising bond yields. Earlier this month, China’s CSI 300 Index entered a technical correction on concerns over lofty valuations and potential liquidity tightening.

Vaccination Halt

“The vaccination process will be slower than expected, resulting in a slower-than-expected recovery of the local economy,” said Steven Leung, executive director at UOB Kay Hian (Hong Kong) Ltd. “Also, traders are still worried about liquidity. Rising bond yields in the U.S. and limited measures by China’s central bank to boost liquidity remain big market overhangs.” Mainland investors offloaded a net HK$6.9 billion ($888 million) of Hong Kong stocks via the trading links with Shanghai and Shenzhen on Wednesday, the second day of selling and the biggest since March 9, according to data compiled by Bloomberg. Hong Kong and Macau temporarily suspended COVID-19 vaccines manufactured by BioNTech SE because of a packaging defect. That marks the latest setback for Hong Kong’s vaccine rollout, slowed by public distrust in the Beijing-backed government.

ON WEDNESDAY, the HSI’s move formed a worrying signal to technical chart watchers as the index breached the neckline of a so-called bearish head-and-shoulders pattern, implying further downside. “Falling below the neckline will lead to heavier selling pressure — some technical analysis believers may start dumping shares,” Castor Pang, head of research at Core Pacific-Yamaichi International Hong Kong Ltd., said earlier in the day. “If the Hang Seng Index closed below 28,200 (points) today, I think it will try to test the low level seen last November.” Meanwhile, rising volatility is also starting to impact investor appetite for Hong Kong’s IPOs and new listings in hot demand last year, with the days of the massive first-day pops likely nearing an end.

On the positive front, Internet gaming giant Tencent Holdings Ltd., which has the highest HSI gauge weight, reported better-than-expected earnings after closing markets. Geely Automobile Holdings Ltd. was the biggest loser on the benchmark, falling 12% on the second day of declines after China’s biggest maker of local, branded cars on Tuesday posted a worse-than-expected drop in 2020 earnings. Shares of Macau casino operators also dropped following the vaccination halt. China’s CSI 300 Index lost 1.6% on Wednesday, closing at its lowest since December 11. “U.S. Treasuries and A-shares more swing Hong Kong stocks for now,” said Tracy Chan, an analyst at KGI Asia.


I have always enjoyed writing and reading other people's blogs. I started writing a journal as a teenager and have since written numerous books and articles. My blog is a place where I can write freely about my personal interests and those of others.

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