HSI Falls Sharply Over Fear Of Renewed Outbreaks

Hong Kong stocks closed sharply lower on Friday, in line with an Asia-wide sell-off, with investors also spooked by fresh infections in the city that have led to the reimposition of containment measures including school closures.

The Hang Seng Index shed 1.8 percent, to 25,727.

On the mainland, the Shanghai Composite Index which has been surging over the past week, lost two percent with Bloomberg News reporting that state-backed funds were easing back on their investments to put a brake on the rally.

The Shenzhen Composite Index lost 0.3 percent, to 2,251.

Tokyo ended 1.1 percent down and Sydney slipped 0.6 percent and Seoul shed 0.8 percent while Taipei dropped 1 percent, with losses also seen in Wellington, Mumbai, Jakarta and Manila.

"Optimism is giving way to de-risking into the weekend as there is no way to sugar-coat, let alone the Fed papering over (with a financial back-stop), the new daily Covid-19 cases," said Stephen Innes at AxiCorp.

And Oanda’s Jeffrey Halley said it was hard to give a confident forecast for the outlook on markets but added that authorities had traders' backs.

"As to which direction equities, that most schizophrenic of financial markets, are heading next, I know not," he said in a note.

"In the bigger picture, though, one must keep one's eyes on the prize: The world's central banks, via bottomless monetary policy easing, have investors' backs. The S&P 500 could easily drop 20 percent from these levels and still be in a bull market."

The risk-off mood hit oil prices and higher-yielding currencies as traders shifted to safer havens such as the yen and US dollar. (AFP)