China stocks track global peers lower before holiday

SHANGHAI: China stocks edged lower on Friday ahead of a week-long holiday, tracking overnight Wall Street losses on inflation worries and recession risks, while a subdued factory activity survey also weighed on sentiment.

** The blue-chip CSI 300 Index and the Shanghai Composite Index both closed down 0.6%.

** The Hang Seng Index edged up 0.3%, while the Hang Seng China Enterprises Index ended almost flat.

** For the quarter, the CSI 300 Index slumped 15.2% to post its biggest quarterly loss since a stock market meltdown in 2015. The HSI saw its worst quarter since 2011, with a 21.2% slump.

** Asian shares experienced the worst month since the onset of the COVID-19 pandemic, while jitters in currency and bond markets persisted.

** “Investor sentiment has not recovered and stayed at a YTD (year to date) through this week, mainly driven by the Fed’s continuous hawkish stance on rate hikes, the ongoing COVID clusters, as well as the depreciation of CNY against USD,” Morgan Stanley said in a note.

** China’s factory activity eked out growth in September, but a slowdown in service sector growth and a downbeat private manufacturing survey pointed to further cooling as the economy grapples with COVID curbs and softening export demand.

** Travel during the National Day golden week holiday, which begins on Saturday, is set to slump to its lowest in years, analysts say, as COVID concerns spur calls for people to avoid travel.

** Consumer discretionary and tourism-related companies lost roughly 2% each, while new energy stocks declined 3.2%.

China stocks track global peers lower as recession fears mount

** China’s central bank made the biggest weekly liquidity injection on a net basis through short-term bond instruments in more than 32 months.

** Real estate developers jumped 3.8%, after the central bank said local governments may relax the floor on mortgage rates for first-time home buyers.

** The yuan gave up all the losses it booked this week, after Reuters reported that China’s major state-owned banks were told to get ready to prop up the currency in offshore trades.