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Hang Seng Index
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Hang Seng Index slammed by Covid-19 concerns, aerospace stocks add fuel to Shanghai bourse’s best gain in 17 months

  • Hang Seng Index retreats as financial, property developers weigh on market on heightened Covid-19 concerns
  • Shanghai Composite Index extends gain after an 11 per cent rally in July, with aerospace companies in focus

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People wearing face masks walk past a bank electronic board showing the Hang Seng Index performance in Hong Kong in May 2020. Coronavirus still dominates sentiment after seven months of pandemic. Photo: Xinhua
Iris Ouyang
Hong Kong stocks retreated amid heightening concerns about Covid-19 infections and renewed pressure on banking stocks, while mainland China equities, particularly of aerospace companies, advanced on hopes for domestic recovery.
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The Hang Seng Index fell 0.6 per cent to 24,458.13 on Monday, after logging in two straight months of advance. The Shanghai Composite Index jumped 1.8 per cent to 3,367.97. It rallied 11 per cent in July, the most since February 2019.

Financial and property stocks dragged down the Hang Seng Index. HSBC declined 4.4 per cent after the lender reported a 69 per cent plunge in first-half earning, and its unit Hang Seng Bank tumbled 2.9 per cent. Hang Lung Properties, one of the city’s biggest landlords, shed 2.7 per cent.

Hong Kong recorded its 36th death from Covid-19, and mainland authorities are dispatching personnel to conduct citywide tests. The first makeshift hospital in the city could take in 500 patients from Saturday at the earliest, the government said. A run of more than 100 new Covid-19 cases daily since July 22 has pushed the total number of infections to 3,511 through yesterday.

In China, aerospace and military stocks powered gains, as China’s Mars mission completed its first orbital correction, extending the euphoria about the sector since July. North Navigation Control, China Spacesat, CITIC Offshore Helicopter surged by the daily cap of 10 per cent.

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Investors are confronted by several risk factors, including the rising cases of Covid-19 across the world as cities in the UK, Australia and the Philippines face the spectre of tighter lockdowns to curb the infections. The fraying US-China relations are worsening with the latest plan to bar Chinese-owned TikTok from the US markets.

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