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The city’s traders have been off their desks for a holiday since Wednesday, before a global market recovery lost momentum and tensions between the U.S. and China flared up over the origin of the coronavirus. Futures on the S&P 500 were down 1.5% as of 8:38 a.m. in Hong Kong, signaling further losses after the underlying index dropped 2.8% to end last week. Hang Seng Index futures will start trading from 9.15 a.m. local time.
Hong Kong authorities are this week preparing to ease some lockdown measures amid signs the coronavirus outbreak has been contained. Still, concern remains over a collapse in corporate earnings in what could be the city’s worst economic slump on record. Renewed sparring between the U.S. and China is also adding to the nervousness, with President Donald Trump escalating efforts to pin blame on China for unleashing the pandemic.
The Hang Seng Index rose 4.4% in April, its first monthly gain of the year. The recovery came as investors made the most of a stabilization in global markets and the city’s cheap valuations — the Hang Seng Index in March traded below book value for only the third time in almost as many decades.
Trading activity in Hong Kong is likely to be subdued Monday, which could further exacerbate moves in the city’s stock market. Links with exchanges in Shanghai and Shenzhen are shut through Tuesday due to a holiday in mainland China. Southbound trading was last open on April 27.
©2020 Bloomberg L.P.
