March 4, 2020 / 8:48 AM / a month ago

Hong Kong stocks ease after Fed rate cut

SHANGHAI/HONG KONG, March 4 (Reuters) - Hong Kong stocks slipped on Wednesday, as an emergency rate cut from the U.S. Federal Reserve seemed to spook rather than soothe global markets. However, losses were contained as bleak data further raised hopes for even more further policy support.

** At the close of trade, the Hang Seng index was down 62.75 points or 0.2% at 26,222.07. The Hang Seng China Enterprises index rose 0.4% to 10,521.78.

** The retreat came after sharp losses overnight on Wall Street after the U.S. Federal Reserve surprised investors with a half percentage-point cut in interest rates, amplifying fears about the magnitude of the coronavirus’s impact.

** The rate reduction underscored the U.S. central bank’s concern about the new coronavirus, which has spread around the world after emerging late last year in China.

** Hours after the Fed move, the Hong Kong Monetary Authority (HKMA) lowered its base rate charged through the overnight discount window by 50 basis points to 1.5%.

** As data pointed to more signs of economic stress from the virus outbreak, hopes are rising of further policy support to shore up growth both on the mainland and Hong Kong.

** The coronavirus epidemic dealt a severe blow to businesses in Hong Kong in February. Activity plummeted to the lowest on record, a private survey showed on Wednesday, in a sign of a sharp economic downturn in the first quarter.

** On the mainland, a survey showed that the services sector had its worst month on record in February as new orders plummeted to their lowest level since the global financial crisis. Economists urged swift support to avoid mass bankruptcies.

** The top gainer on the Hang Seng was Link Real Estate Investment Trust, which gained 3.14%, while the biggest loser was Hang Seng Bank Ltd, which fell 3.99%.

** China’s main Shanghai Composite index closed up 0.6% at 3,011.67 points, while the blue-chip CSI300 index ended up 0.6%.

** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.3%, while Japan’s Nikkei index closed up 0.1%.

** The yuan was quoted at 6.9335 per U.S. dollar at 0835 GMT, 0.6% firmer than the previous close of 6.9761.

Reporting by Luoyan Liu in Shanghai and Noah Sin in Hong Kong; Editing by Kevin Liffey

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