China’s shares drop over 1% on inflation worries, new COVID cases

SHANGHAI: China’s shares extended losses on Wednesday, as market watchers remain on edge amid fears of a wider impact of commodity prices’ surge on Beijing, while new coronavirus cases in the world’s second-largest economy also weighed on risk sentiment.

** At the midday break, China’s blue-chip CSI300 index was down 1.27% at 4211.27, the lowest since July 1, 2020. The Shanghai Composite index fell 1.07% to 3,258.17 points.

** The Hang Seng Index slumped 2.19% to 20,311.23. The sub-index of the Hang Seng index, which tracks energy shares , dipped 0.9% while the IT sector fell 2.7%.

** Sentiment in the A-share market would continue to be weak as geopolitical tensions remain unsolved while commodity prices are hiking all the time, analysts said.

** The real-estate index slumped 3.83% and the healthcare sub-index fell 2.84%. ** China’s factory inflation in February eased to the slowest annual pace in eight months due to seasonal effects from the Lunar New Year holiday, but analysts expect it to rise in the coming months because of surging global commodity prices.

** Shares of companies exposed to Tsingshan Holding Group, the Chinese nickel producer squeezed by the surge in the metal’s prices, tumbled with Zhejiang Huayou Cobalt slumping nearly 10%.

** Tsingshan bought large amounts of nickel to reduce its short bets on the metal and its exposure to costly margin calls, turbocharging a record rally fuelled by the conflict in Ukraine, three sources familiar with the matter said.

** Chinese companies that defy US restrictions against exporting to Russia may be cut off from American equipment and software they need to make their products, US Commerce Secretary Gina Raimondo told the New York Times.

** Mainland China reported 337 new confirmed coronavirus cases on March 8, the country’s national health authority said on Wednesday, compared with 325 a day earlier.

** China’s central bank said on Tuesday it will pay more than 1 trillion yuan ($158.30 billion) in profit to the central government this year.

** The smaller Shenzhen index was down 1.76%, the start-up board ChiNext Composite index was weaker by 1.61% and Shanghai’s tech-focused STAR50 index dropped 0.72%.

** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.11%, while Japan’s Nikkei index climbed 0.58%.

** The yuan was quoted at 6.3172 per US dollar, 0.04% firmer than the previous close of 6.3195.