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China, HK stocks drop on COVID outbreaks, geopolitical risks

Reuters · 11/15/2022 23:53
China, HK stocks drop on COVID outbreaks, geopolitical risks

- Chinese and Hong Kong shares fell on Wednesday, as concerns grew about rising COVID-19 cases in China, while market participants assessed risks after a blast in Poland stoked worries of an escalation of the Russia-Ukraine war.

** China's benchmark CSI300 Index .CSI300 fell 0.4% by the lunch break, while the Shanghai Composite Index .SSEC lost 0.2%. Hong Kong's Hang Seng Index .HSI declined 1.1%.

** The markets had rebounded over the past two weeks on the back of government measures to support a struggling property sector and Beijing's incremental relaxation of its strict zero-COVID policy.

** But rapidly rising virus infections in major Chinese cities, including Guangzhou, Beijing and Zhengzhou, are fuelling worries about China's economic health.

** China reported 20,199 COVID-19 infections for Nov. 15, including both symptomatic and asymptomatic cases, compared with 17,909 cases a day earlier.

** "The chaotic and rapidly evolving situation presents economic uncertainty that seems likely to further dampen consumption and property sales in the term," Yibei Dong, an economist at Gavekal Dragonomics, wrote in a to clients.

** "The volatility means the economic outlook is unlikely to improve much in the short term, especially as the recent drivers of growth continue to fade."

** Official data showed on Thursday that home prices slumped 1.6% in October on an annual bases, the fastest pace of decline in more than seven years.

** A Russian-made rocket fell on NATO member Poland and killed two people, raising concerns that the Ukraine conflict could spill over its borders. Moscow denied it was responsible.

** China's tech .STAR50 and financial .CSIFN stocks were down, but travel-related stocks rose after China eased COVID curbs for domestic group tours organised by travel agencies.

** China's tourism sector .CSI930633 rose 0.8%, with China Tourism Group Duty Free Corp 601888.SS up 3.7%.

** Shijiazhuang Yiling Pharmaceutical Co 002603.SZ, a maker of anti-cold drugs, surged as much as 9.8%, bringing this week's gains to 24%.

** In Hong Kong, tech .HSTECH and Chinese property shares .HSMPI tanked, giving up some of their recent sharp gains.

(Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu)