Hong Kong Stocks Gain As MERS Fears Ease, But Shanghai Falls Again

MarketWatch Pulse

Hong Kong stocks clawed their way back up Thursday after losses in the previous session over fear that the Middle East Respiratory Syndrome (MERS) outbreak currently afflicting South Korea had spread to the Chinese territory. The Hang Seng Index was up 0.8% about 15 minutes into trade, coming back from a 1.1% drop Wednesday, as Hong Kong health authorities said that there were no confirmed MERS cases as of yet. Still, concerns over the threat from the fatal illness dragged on travel-related shares, with China Southern Airlines Co. down 0.1%, and China Eastern Airlines Corp. falling 1.3%, while local flag-carrier Cathay Pacific Airways Ltd. edged 0.2% higher after falling 1.6% the previous day. Overnight gains for U.S. and European markets helped the financials, however, with HSBC Holdings PLC up 1%, Bank of Communications Co. up 1.1%, and Haitong Securities Co. rising 1.7%. Standard Chartered PLC was 2.2% higher after jumping in London trade as a Wall Street Journal report cited an internal memo about StanChart's intention to strengthen its financial position. China Construction Bank Corp. was 0.7% higher, with Chinese media saying the lender would become the first to issue large certificates of deposit Monday under a new regulatory program. On the downside, China Resources Land Ltd. fell 1.6%, and China Resources Power Holdings Co. lost 3.6%, as both names traded ex-dividend. Over on the Chinese mainland, the Shanghai Composite fell 0.3%, with major decliners including China Shenhua Energy Co. (down 2.7%), Bank of Communications (down 2%) and Dongfeng Motor Group Co. (down 2.2%).

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