HSI, Mainland Markets Fall As Profit Takers Move In

Hong Kong shares finished more than 1 percent lower Wednesday, hit by profit-taking after a two-day rally and as investors keep tabs on the spread of the coronavirus.

The Hang Seng Index slipped 1.2 percent, to 23,970.

Across the border, the Shanghai Composite Index dropped 0.2 percent, to 2,815, and the Shenzhen Composite Index eased 0.1 percent, to 1,740.

Most other Asian equities also retreated, while the oil market continued to fluctuate ahead of a crucial producers' meeting.

Singapore lost 2 percent, while Sydney and Seoul eased each 0.9 percent. Bangkok, Manila and Jakarta also saw steep falls.

Tokyo, however, rose more than 2 percent as Japan's government unveiled details of a US$1 trillion stimulus package, and Taipei piled on 1.4 percent. Wellington also rose and Mumbai was flat.

Jeffrey Halley, at Oanda, offered a warning for traders to beware any false dawn.

"A lot of good news has been built into asset markets this week on the most tenuous signs that the outbreak is peaking," he said in note. "Should that be proved premature the correction... could be very ugly indeed." 

He said a bear market rally should not be mistaken for the beginning of a V-shaped recovery, adding: "The best we can hope for is a U, with a W in a close second place."

Oil prices rallied, but the commodity continues to swing as traders keenly await Thursday's planned meeting of the world's top producers, which will discuss a possible output cut.

The commodity has been battered by the virus as lockdowns around the world bring the global economy to a standstill and drag on demand, while a price war between Russia and Saudi Arabia has compounded the crisis. (AFP)