Shanghai stocks fall most in 6 weeks amid COVID flare-ups; HK down
SHANGHAI — Shanghai shares dropped the most in six weeks on Wednesday, and Hong Kong’s stock benchmark fell more than 1%, as China continued to grapple with COVID-19 flare-ups, while energy stocks tracked a sell-off in the global oil market.
** The Shanghai Composite Index fell 1.4%, the biggest one-day percentage fall since May 24. The blue-chip CSI300 Index lost 1.5%, while Hong Kong’s benchmark Hang Seng Index weakened 1.2%.
** China is fighting a COVID-19 resurgence on multiple fronts across the country including an emerging cluster in Shanghai, spurring mass testing drives and fresh restrictions.
** Shanghai, which lifted its two-month-long lockdown in early-June, is testing all residents in nine of its 16 districts until Thursday as well as those in parts of three other districts.
** “The flare-ups in places such as Shanghai and Anhui contributed to the stock market weakness,” said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management.
** However, he pointed that the market had expected possible increase in infections, so there’re no signs of panic-selling.
** Zhang also predicted higher volatility ahead as the pace of China’s economic recovery will likely slow.
** Energy shares tumbled more than 4% in both China and Hong Kong, after a slump in global oil prices amid fears of a global recession.
** Most sectors traded in negative territory in both markets.
** China’s property shares dropped 3.3%, while resources shares fell 2.9%.
** Tech shares were the only bright spot on the mainland, with the tech-focused STAR50 Index rising 1%, led by chipmakers.
(Reporting by Shanghai Newsroom; Editing by Sherry Jacob-Phillips)