Hong Kong stocks post worst week in four as virus fears grow

Hong Kong stocks fell on Friday, posting their worst week in a month, as the rapid spread of the coronavirus across the world sparked fears of contagion and sent global markets reeling. ** At the close of trade, the Hang Seng index was down 2.4% at 26,129.93. The index is down 4.3% week-on-week and 0.7% from the previous month.

** The Hang Seng China Enterprises index fell 2.7% on Friday, down 4.5% from the previous week but up 0.6% from January. ** Both indexes marked their worst week since late January. ** The sub-index of the Hang Seng tracking energy shares dipped 3.5%, the IT sector lost 3.4%, the financial sector ended 2% lower and the property sector fell 2.2%. ** Countries on three continents reported their first cases of the coronavirus on Friday as the world prepared for a pandemic of the disease and investors dumped equities in expectation of a global recession.

** Chinese policymakers have implemented a raft of measures to support an economy jolted by a coronavirus outbreak that is expected to have a devastating impact on first-quarter growth. ** On Wednesday, Hong Kong unveiled a record budget deficit, pledging cash handouts to residents and business tax breaks to soften the blow to the recession-hit economy from often-violent protests and the coronavirus. ** China's monetary policy to hedge the impact of the coronavirus could release ample liquidity, which bodes well for Hong Kong equities, said Lin Hongyi, analyst at Yunfeng Financial Group, in a report. ** After the launch of the Stock Connect, Hong Kong stocks, given its lower valuations than their mainland peers, have been attracting long-term funds from the mainland, Lin said. ** On Friday, southbound flows into the Asian financial hub continued their strong momentum, with mainland investors purchasing nearly 5 billion yuan worth of HK-listed shares. ** At close, China's A-shares were trading at a premium of 26.73% over Hong Kong-listed H-shares.

** About 3.19 billion Hang Seng index shares were traded, highest daily volume since Feb. 2019. The volume traded in the previous trading session was 2.11 billion.