Hong Kong's Hang Seng index drops 2% amid Evergrande trading halt

SINGAPORE — Asian markets were mixed in Monday trade, with the hang seng index in Hong Kong tumbling a lot more than 2% following its return from the Friday holiday.

The Hang Seng index fell 2.19% to 24,036.37, by the market close in Hong Kong.

Trading in shares of China Evergrande was halted, as investor concern surrounding the indebted property developer returned.

Trading in the shares of Evergrande Property Services was also halted, with the firm saying in a trade filing that there's an impending announcement regarding a “possible general offer for the shares of the company.”

At the same time, the shares of another Chinese property developer Hopson were also suspended. Hopson said in a filing so it has halted its shares pending a “major transaction” under which it has agreed to get the shares of another company.

Investors continued to monitor the situation surrounding the debt worries of Evergrande, which has missed two bond interest payments previously weeks.

“Evergrande default related stress may go back to the fore as a buck note worth USD260mn issued by Jumbo Fortune Enterprises, guaranteed by Evergrande, effectively matures today,” Mizuho Bank wrote in a Monday note. “Nonpayment would constitute a default.”

Meanwhile, shares in Asia-Pacific were mixed after Merck announced its new Covid oral antiviral treatment that cuts the risk of hospitalization or death.

In Japan, the Nikkei 225 shed 1.13% to close at 28,444.89 as the Topix index dipped 0.62% in order to complete the trading trip to 1,973.92.

Australian stocks jumped on the day, with the S&P/ASX 200 up 1.29% to 7,278.50.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.25%.

Merck and Ridgeback Biotherapeutics announced Friday they've developed a drug which reduces the risk of hospitalization or death by around 50% in Covid patients. If authorized by regulatory bodies, the drug could possibly be the initial oral antiviral medicine for Covid.

The businesses plan to get emergency authorization for the antiviral Covid treatment following the medicine showed “compelling results” in clinical trials.

Markets in China are closed for most of the week for a holiday and are set to reopen on Friday. South Korean markets were also closed on Monday for a holiday.

Currencies and oil

The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 93.929 after having a recent decline from above 94.4.

The Japanese yen traded at 111.14 per dollar, more powerful than levels around 112 seen contrary to the greenback last week. The Australian dollar changed hands at $0.7267 following a bounce late a week ago from around $0.72.

Oil prices were higher in the afternoon of Asia trading hours, with international benchmark Brent crude futures up 0.15% to $79.40 per barrel. U.S. crude futures gained around 0.1% to $75.95 per barrel.