SHANGHAI: China stocks fell on Thursday as the country's worst coronavirus outbreak since the initial wave in 2020 clouded economic growth outlook, despite pledges by authorities to roll out more policy support.
The CSI300 index fell 0.9% to 4,225.95 by the end of the morning session, while the Shanghai Composite Index lost 1% to 3,251.06. The Hang Seng index dropped 1.3% to 21,791.30. The Hong Kong China Enterprises Index lost 1.5% to 7,497.38.
** China will establish a financial stability protection fund to beef up its ability to cope with major financial risks, and set up a comprehensive cross-agency mechanism for risk detection and disposal, the central bank said on Wednesday.
** Meanwhile, Chinese state media quoted the cabinet as saying it would roll out policies to stabilise market expectations in a timely way, without giving details.
** "Worries over the downside trend of the economy are the main factor weighing down the market. Meanwhile, the resurgence of COVID-19 outbreaks slowed the pace of economic recovery," said Lang Pincheng, general manager of research department at Fortune & Royal Asset.
** "With an increasingly large number of cities under lockdown and amid the downward spiral in the property sector, the impact of incoming monetary easing might be quite limited," Nomura analysts said in a note.
** "We expect only one 10bp rate cut to each of the one-year MLF, one-year and five-year LPR, and seven-day reverse repo before end-2022."
China stocks fall as COVID surge dents services activity
** Real estate developers slumped 2.1% and tourism stocks lost 1.9%, according to data from China Securities Index. Healthcare shares retreated 2.2%.
** Mainland China reported 1,323 new confirmed coronavirus cases and 21,784 new asymptomatic cases on April 6.
** Also denting sentiment, minutes of the Fed's March 15-16 meeting released on Wednesday showed deepening concern among policymakers that inflation had broadened through the economy.
** Tech giants listed in Hong Kong lost 2.1%, with e-commerce giant Alibaba Group down 2%. Food delivery firm Meituan was up 0.5% after surging as much as 7.2% in early morning trade.
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