HSI Falls 4% As Jitters Sweep Aside Stimulus Boost

Hong Kong shares suffered an afternoon collapse on Wednesday, reversing a morning rally that had come on the back of massive stimulus pledges from governments looking to soften the impact of the coronavirus.

The Hang Seng Index sank 4.2 percent, to 22,291.

On the mainland, the Shanghai Composite Index shed 1.8 percent, to 2,728 and the Shenzhen Composite Index lost 1.6 percent, to 1,678.

The pattern was repeated across Asia, with traders fretting about the future as economists predict the US will slip into a recession, with warnings of a 6 percent contraction during the second quarter.

Tokyo ended down 1.7 percent, while Sydney plunged more than 6 percent.

Seoul shed almost 5 percent, Mumbai and Jakarta lost more than 3 percent and Taipei retreated more than 2 percent.

Singapore was 0.9 percent lower but Wellington squeezed out gains.

US and European stocks rallied on Tuesday but in early trade London, Paris and Frankfurt went into sharp retreat, while US futures also pointed to a rough day for Wall Street.

Before the market opened in Paris, French regulators banned short-selling for a month, extending an initial one-day halt, in an effort to curb steep losses.

Crude oil also reversed early advances, flirting with 17-year lows as demand for the commodity falls off a cliff with Saudi Arabia and Russia engaged in a price war that has ramped up output.

AxiCorp's Stephen Innes said the demand outlook remained "dismal", adding: "Indeed, the scale of the economic impact of Covid-19 on the major world economies is unparalleled." (AFP)