HK, Mainland Shares End Half-day Session With Losses

Hong Kong shares ended the Friday morning session with losses, in line with a global retreat as a surge in new virus cases fanned fears the reimposition of containment measures will hit a shaky economic recovery.

The Hang Seng Index dropped 0.55 percent, or 144 points, to 26,025.

Mainland shares fell as well following the Trump administration's decision to ban US investments in firms linked to the Chinese military, with sentiment also hurt by more bond defaults.

The CSI300 index shed 1 percent to 4,862 at the end of the morning session, while the Shanghai Composite Index lost 0.8 percent, to 3,313.

Heavyweight banking shares led the decline on worries over asset quality following corporate bond defaults.

"There could be more bond defaults in the future, given a backdrop of China's economic transformation to high quality growth which causes 'survival of the fittest'", said Fu Yanping, analyst with China Galaxy Securities. But Fu does not expect a systemic financial risk.

Chinese highway, street and bridge construction firm Chenglong Construction Group Co Ltd said it had defaulted on interest and principal payments on a company bond due on Nov 13, and China's interbank bond market regulator said on Thursday that it was launching an investigation into Yongcheng Coal and Electricity Holding Group Co Ltd after the state-owned firm defaulted on a bond payment. (AFP & Reuters)