Hong Kong-listed stocks tumbled Thursday on fears of a second wave of Covid-19 infections and U.S.-China trade tensions.
Among the biggest sell-offs, today in Hong Kong were Airline and casino related stocks. China’s top three state-owned airlines tumbled, as the China Eastern Airlines Corporation Ltd. (HKEX: 0670) tanked 3% to HK$ 2.88 per share, China Southern Airlines Company Ltd. (HKEX: 1055) slipped nearly 3% at HK$3.45 per share and Air China Ltd. (HKEX: 0753) declined 2% to HK$5.11 per share.
It also wasn’t pretty for Macau casino operators, as MGM China Holdings Ltd. (HKEX: 2282) fell nearly 3% to HK$9.33 per share and Galaxy Entertainment Group Ltd. (HKEX: 0027) traded down more than 2% at HK$52.90 per share.
President Trump said Monday after the markets closed in the U.S. that he will not entertain reopening phase one of the trade deal with China.
“No, not at all. Not even a little bit,” Trump said in a White House press briefing on Monday.
He added, “I’m not interested. We signed a deal. I had heard that too, they’d like to reopen the trade talk, to make it a better deal for them.”
Trump has threatened in the past to rip up the agreement if China backs off its terms, which includes purchasing $200 billion worth of U.S goods.
Even though Hong Kong hasn’t reported a Covid-19 case for more than three weeks, investors are likely concerned over the recent outbreak of infection in South Korea and Germany.
“There is more and more discussion on the second wave of the virus,” Alan Li, a portfolio manager of Atta Capital said.
He continued “That gives an excuse for profit taking and deeper adjustment.”
The Hang Seng Index dropped more than 1% to 24,245.68 points on Tuesday close in Hong Kong, ending a two-day winning streak for the benchmark.
Last week, Hong Kong started to reopen public entertainment venues, while allowing people to go out in groups of up to eight.