Wednesday, November 30

China, HK stocks drop on COVID outbreak, geopolitical risks

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SHANGHAI — 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 fears of an escalation of the Russia-Ukraine war.

** China’s benchmark CSI300 Index closed down 0.8%, while the Shanghai Composite Index lost 0.5%. Hong Kong’s Hang Seng Index declined 0.5%.

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** 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.

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

** China reported 20,199 new COVID-19 infections for Nov. 15, including both symptomatic and asymptomatic cases, compared with 17,909 new 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 near term,” Yibei Dong, an economist at Gavekal Dragonomics, wrote in a note 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.”

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

** An index tracking Chinese property developers finished down more than 3%.

** 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 and financial stocks slipped.

** Shijiazhuang Yiling Pharmaceutical Co, a maker of anti-cold drugs, surged 5%, bringing this week’s gains to 27%.

** In Hong Kong, tech and Chinese property shares tanked, giving up some of their recent sharp gains. (Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu)

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