February 26, 2020 / 8:41 AM / a month ago

Hong Kong stocks weaken amid pandemic fears

* HSI -0.7%, HSCE -0.7%, CSI300 -1.2%

Feb 26 (Reuters) - Hong Kong stocks closed lower on Wednesday as fears grew over the rapidly spreading coronavirus outbreak outside China, though losses narrowed after the Asian financial hub rolled out stimulus to prop up its economy.

** Asia reported hundreds of new coronavirus cases, including the first U.S. soldier to be infected, as the United States warned of an inevitable pandemic, and as outbreaks in Italy and Iran spread to more countries.

** The benchmark Hang Seng index fell as much as 1.54% in early trade following Wall Street’s sharp losses on growing fears of a global pandemic. The index later recovered some ground as investors cheered Hong Kong’s latest stimulus, finishing the day down 0.73%.

** Hong Kong unveiled a record budget deficit, pledging cash handouts to residents and business tax breaks to soften the blow to the recession-hit economy from often-violent protests and the coronavirus.

** While the measures are not expected to arrest the downturn in the Asian financial hub, they will provide households and companies hit hard by recent events with some financial relief, analysts said.

** Mainland China reported 406 new confirmed cases of infections on Tuesday, the country’s National Health Commission (NHC) said on Wednesday, down from 508 cases a day earlier.

** Outside Hubei, the number of new mainland cases fell to five, down for the fifth consecutive day and the lowest since Jan. 20, when the NHC began publishing nationwide figures.

** Southbound flows continued to help lift the market, with mainland investors purchasing about 4.5 billion yuan worth of shares via the Stock Connect for the day. (Reporting by Luoyan Liu and Andrew Galbraith; Editing by Subhranshu Sahu)

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