Hong Kong stocks fall most in nearly 26 months amid broad sell-off

• The Hang Seng index fell 4.9pc to 21,696.13, posting its biggest drop since Feb. 6, 2018, while the China Enterprises Index lost 4.0pc to 8,751.76.
• The sub-index of the Hang Seng tracking energy shares dipped 4.4pc, the IT sector fell 4.39pc, the financial sector ended 4.37pc lower and the property sector declined 6.13pc.

Hong Kong stocks fell on Monday by their most in nearly 26 months, joining a global sell-off as national lockdowns to contain the spread of the coronavirus outbreak threatened to overshadow policymakers' efforts to prevent a global recession.

The Hang Seng index fell 4.9pc to 21,696.13, posting its biggest drop since Feb. 6, 2018, while the China Enterprises Index lost 4.0pc to 8,751.76.

The sub-index of the Hang Seng tracking energy shares dipped 4.4pc, the IT sector fell 4.39pc, the financial sector ended 4.37pc lower and the property sector declined 6.13pc.

The top gainer on the Hang Seng was Wharf Real Estate Investment Company Ltd, which climbed 1.32pc, while the biggest loser was Techtronic Industries Co Ltd, which fell 13.01pc.

Around the region, MSCI's Asia ex-Japan stock index dropped 5.3pc as restrictions across the world to stem the spread of the virus threatened to overwhelm frantic policy efforts to cushion what is likely to be a deep global recession.

Meanwhile, mainland investors continued to hunt for bargains in the Asian financial hub, buying more than 10 billion yuan ($1.41 billion) worth of Hong Kong-listed stocks via the Stock Connect for the day, as they expected Beijing would roll out more policy measures to underpin China's economy.

A Chinese central bank official said on Sunday Beijing's recent policy measures were gaining traction, while it had capacity for further action.

The People's Bank of China has already rolled out a raft of measures to counter the economic blow from the outbreak, including cutting lending rates and banks' reserve ratios, and doling out cheap loans for selected firms.

Zhou Liang, vice chairman of the China Banking and Insurance Regulatory Commission, said China was ready to buffer financial risks caused by the pandemic, and was studying plans to reform the country's asset management companies that are tasked to deal with bad loans.

The yuan was quoted at 7.1148 per US dollar at 08:13 GMT, 0.25pc weaker than the previous close of 7.097.

At close, China's A-shares were trading at a premium of 31.82pc over Hong Kong-listed H-shares.