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In: Finance

How has Covid 19 impacted Asian stock markets, particularly Hong-Kong market? Do some research and answer...

How has Covid 19 impacted Asian stock markets, particularly Hong-Kong market? Do some research and answer in a partner page. Don't forget to add references.

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Expert Solution

The Covid 19 has triggered a massive sell off across asset classes like stock market, fixed income market ,real estate etc throughout the world. Majority of the Asian market indices represent emerfing markets like India, China etc. The stock market plunged to its 3 years low especially in India in March this year when investors realised how dangerous the virus is. In fact every market whether emerging or developing witnessed a massive sell off in March. Investors took out the money and invested in safe bets like Gold and Dollar. Gold price have risen very much. Every sector did suffer during that period. If we speak about Hong-Kong market the Hangseng index collapsed to value of 21,696 on 23rd March,2020. While its one year high was very close to 29,000.

Automobiles & ancillary, real estate, construction projects, FMCG companies suffered a lot because of the virus. The supply chain movement was disrupted. The virus toll a heavy toll on the workers. Although the market has recovered a lot as of now. The index is at 24,778 value. But another wave of virus and lock down could take a heavy toll on the market. The worst hit was Finance sector which is one of the component of Hong-Kong index because of rise in bad loans and companies defaulting to service debt because of no revenue generation during the lock down phase and more supply chain disruptions.

China’s cabinet-level health policymaker pledged all necessary support for Hong Kong to fight an escalating crisis as the city confirmed another record-high 123 Covid-19 infections last week.

The Hang Seng Index is a free-float capitalization-weighted index of a selection of companies from the Stock Exchange of Hong Kong. The components of the index are divided into four subindices: Commerce and Industry, Finance, Utilities, and Properties. The index was developed with a base level of 100 as of July 31, 1964. HSI does not have official ISIN registered.

Sources

https://www.scmp.com/news/hong-kong/health-environment/article/3094524/coronavirus-hong-kong-sees-16th-covid-19-death

https://www.bloomberg.com/quote/HSI:IND

google.com/search?q=INDEXHANGSENG:+HSI&stick=H4sIAAAAAAAAAONgecRowi3w8sc9YSntSWtOXmNU5eIKzsgvd80rySypFBLnYoOyeKW4uTj1c_UNDPOyLDN4ALHew-A5AAAA&tbm=fin#scso=_xDseX9i6IMrDz7sPyPeikAY1:0


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