March 19, 2020 / 9:15 AM / 14 days ago

Hong Kong stocks cap losses on policy hopes

March 19 (Reuters) - Hong Kong stocks ended lower on Thursday, though losses were contained on hopes of further stimulus to underpin China’s economy.

** The Hang Seng Index dropped 2.6% to 21,709.13, while the HSCE lost 2.7% to 8,559.64%

** The HSI dropped more than 5% in morning trade to its lowest since mid-2016, joining a global rout as emergency central bank measures in Europe, the United States and Australia failed to halt a fresh wave of panic selling.

** Stock values and fundamentals are being ignored for now as everyone wants cash ... (due to the) level of crisis caused by the coronavirus outbreak, said Linus Yip, a Hong Kong-based analyst with First Shanghai Securities.

** It’s really difficult to predict a bottom for Hong Kong equities, as the global liquidity risks need to be alleviated first before any confidence could be restored, he added.

** Stock recouped some lost ground in the afternoon, on hopes that more stimulus would be provided to bolster China’s economy.

** China is widely expected to cut its benchmark lending rate on Friday to help its virus-stricken economy, a survey of traders and analysts found, though borrowing costs on medium-term loans were left unchanged earlier this week.

** China will help exporters who suffer from dwindling orders amid the coronavirus outbreak with fiscal, financial and export credit insurance measures, while supporting services firms seeking to accelerate their resumption of work, the commerce ministry said on Thursday.

** Also providing some support were signs that the virus has been brought under control in the country.

** The central Chinese city of Wuhan, the epicentre of the country’s coronavirus outbreak, reported no new infections for the first time, while imported cases surged by a record, led by new infections in the capital of Beijing. (Reporting by the Shanghai Newsroom Editing by Gareth Jones)

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