China stocks jump on easing COVID curbs
SHANGHAI — China stocks posted their best day in three weeks on Tuesday, as the country relaxed COVID curbs further, while a faster-than-expected virus infection peak raised expectations of a quicker economic recovery.
** China’s blue-chip CSI 300 Index ended higher 1.2%, while the Shanghai Composite Index added 1%. Both the indexes logged their biggest daily jumps since Dec. 5.
** Hong Kong markets were closed on Tuesday for Christmas.
** China will stop requiring inbound travelers to go into quarantine starting from Jan. 8, the National Health Commission said on Monday. It will also downgrade the seriousness of COVID-19 as it has become less virulent and will gradually evolve into a common respiratory infection.
** “It marks another major step in China’s reopening, especially to the rest of the world, despite recent spike in local infection cases,” J.P. Morgan analysts wrote in a note.
** They expected a shorter transitional pain in 1Q23, followed by above-trend sustained recovery from 2Q23 onwards.
** Shares in consumer staples, banks and transportation jumped between 1.5% and 2% to lead the gains.
** The upbeat mood came even as data showed profits at China’s industrial firms contracted further in the January-November period due to strict COVID-related curbs.
** However, tourism-related companies slipped 0.7% and some drugmakers tumbled as a few investors booked profits following the news.
** Air China lost 2.4%, Yunnan Tourism declined 2% and Shijiazhuang Yiling Pharmaceutical slumped 7.7%.
** China’s banking and insurance regulator said the country will step up financial support to small and private businesses in the catering and tourism sectors that were hit hard by the pandemic.
** Huaan Securities said the spread of the virus was faster than expected. “The infection will gradually peak before the Spring Festival, based on local health commissions’ estimates and the Baidu search index,” they wrote in a note.
** “Therefore, the pace of consumption recovery will come earlier, and it will provide a better environment for the implementation of support policies.”
** Huaan analysts added traffic volume and consumption data during the Chinese New Year holidays will be important indicators to measure the recovery of consumption in the first quarter of 2023. (Reporting by Shanghai Newsroom; Editing by Krishna Chandra Eluri and Vinay Dwivedi)
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