China stocks close down as COVID woes drag on
SHANGHAI — China stocks closed lower on Thursday, defying a rally in other Asian markets, as lingering domestic COVID-19 outbreaks kept sentiment subdued and clouded the economic outlook.
Hong Kong’s main benchmark, meanwhile, dropped for a sixth consecutive session, hovering around a half-year low.
** The blue-chip CSI 300 Index closed 0.4% lower, while the Shanghai Composite Index lost 0.3%.
** The Hang Seng Index fell 1%, and the Hang Seng China Enterprises Index dropped 1.2%. Both indexes closed at their lowest level since March 15.
** Other Asian stocks gained, extending an overnight global rally, as investors awaited U.S. Federal Reserve Chair Jerome Powell’s speech later in the day for signs of any let-up in the central bank’s hawkish approach to tame inflation.
** Chengdu, the capital of the southwestern Chinese province of Sichuan, extended a lockdown in most of its districts on Thursday, to stem further transmission of COVID-19 in the city of 21.2 million people.
** Semiconductors went down 1.3%, and new energy shares declined 1.5%.
** Tourism-related shares and transport companies rose 2.2% and 1.2%, respectively.
** Oil prices settled sharply lower on Wednesday, slumping below levels seen prior to Russia’s invasion of Ukraine as downbeat Chinese trade data fed investor worries about recession risks.
** Energy shares lost 1.6% in mainland market, while tumbling 3.2% in Hong Kong.
** The Chinese city of Zhengzhou vowed to start building all stalled housing projects within 30 days. However, mainland property developers listed in Hong Kong fell 2.4%.
** The Hang Seng Tech Index closed 1% lower, with Tencent plunging 3.2% to become the biggest drag on the Hang Seng benchmark.
** Brokers say Tencent shares worth about HK$58 bln ($7.4 bln) appeared in Hong Kong’s clearing and settlement system, triggering speculation that a major shareholder is gearing up to unload some shares.
** Data on Wednesday showed China’s exports growth weakened in August, and research firms including Nomura said it might be finally becoming a real drag.
** However, “the rapid fall in export growth could perhaps force Beijing to rethink its domestic policy stance on the property sector, its zero-COVID strategy, e-commerce and others,” Nomura said in a note. (Reporting by Shanghai Newsroom; editing by Uttaresh.V and Krishna Chandra Eluri)