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China stocks fall on COVID concerns, U.S. inflation

China stocks fall on COVID concerns, U.S. inflation

reuters.com · 06/13/2022 01:02
China stocks fall on COVID concerns, U.S. inflation

- China stocks fell on Monday, as Shanghai and Beijing conducted new rounds of COVID-19 mass testing, sparking worries of fresh outbreaks and lockdowns, while highflying U.S. inflation raised concerns that the Federal Reserve may tighten policy for too long and cause a sharp slowdown.

The CSI300 index .CSI300 fell 1.3% to 4,184.81 points at the end of the morning session, while the Shanghai Composite Index .SSEC declined 1.1% to 3,248.51 points.

The Hang Seng index .HSI dropped 2.8% to 21,193.95 points. The Hong Kong China Enterprises Index .HSCE fell 2.9% to 7,392.79.

** Beijing's most populous district Chaoyang announced three rounds of mass testing to quell a "ferocious" COVID outbreak that emerged at a bar last week, while Shanghai conducted mass testing over the weekend.nL1N2XZ00YnL1N2XY012

** Global equity markets slumped, as the U.S. consumer price index posted a 8.6% rise last month, the largest year-on-year increase since December 1981, beating analysts' expectations of 8.3%. nL1N2XX118nL1N2Y001Z

** CICC analysts said A-shares might continue to rebound in bumpy trade in the short term, but performance for the second half of this year will depend on the economy's fundamentals due to both domestic and overseas uncertainties.

** New bank lending in China jumped far more than expected in May and broader credit growth also quickened as Beijing steps up policy support. nL1N2XX0KR

** However, 38% of the new monthly loans were in the form of short-term bill financing, suggesting real credit demand remains weak.

** China's fund association issued guidelines on Friday designed to discourage short-termism and promote healthy development of the $3.8 trillion mutual fund industry. nL4N2XX2PJ

** Real estate developers .CSI000952 and tourism stocks .CSI930633 both tumbled more than 3%, while shares in banks .CSI000951, energy .CSIEN, and infrastructure .CSI000950 lost more than 2% each.

** Tech giants listed in Hong Kong .HSTECH slumped 3.7%, with index heavyweights Alibaba 9988.HK, Tencent 0700.HK and Meituan 3690.HK down between 4% and 6%.

** New Oriental Education & Technology Group 9901.HK and its online education unit Koolearn Technology 1797.HK jumped 12% and 74% respectively, as a live stream featuring the New Oriental chairman and an English-speaking host hawking agricultural goods went rival, SCMP reported.

(Reporting by Shanghai Newsroom; Editing by Shailesh Kuber)