Hong Kong Stocks Close In Negative Territory

Hong Kong stocks closed in negative territory on Thursday after rising for three days, hit by profit-taking and rising tensions between China and the US.

The Hang Seng Index retreated 0.5 percent, or 119 points, to 24,280.

The benchmark Shanghai Composite Index fell 0.6 percent, or 15 points, to 2,867, while the Shenzhen Composite Index on mainland’s second exchange lost 1 percent, or 17 points, to 1,788.

Stock markets across the region struggled after rallying for much of the week, dragged down by concerns over the long-term impact of the coronavirus.

Equities have enjoyed weeks of advances thanks to signs of an easing in the disease in major economies and the gradual lifting of lockdown measures that are expected to have sent the world into a deep recession.

But that optimism has been tempered by uncertainty about the future, while Donald Trump has continued to target China over the outbreak and threatened fresh tariffs on the country, fuelling worries of another painful trade war between the superpowers.

Stephen Innes, of AxiCorp, warned that investors might not be taking the simmering tensions seriously enough.

"Markets may be pricing in far too much complacency as the US-China 'phase one' trade deal could be at risk, as the pandemic and resulting acute economic downturn have made China's trade commitment to the US much more challenging to fulfil," he said in a note.

Minutes from the Federal Reserve highlighted its concerns about the impact of the outbreak.

Policymakers were worried that "even after social-distancing requirements were eased, some business models may no longer be economically viable".

This would be the case especially if consumers decide to "avoid participating in particular forms of economic activity", the minutes said.

Tokyo ended down 0.2 percent, with Sydney, while Singapore dropped 0.1 percent and Wellington gave up 0.5 percent.

However, Mumbai, Seoul, Taipei, Kuala Lumpur and Manila were all in positive territory. (AFP)