China stocks slump most in a month as COVID curbs, inflation woes weigh

SHANGHAI: Chinese shares posted their biggest drop in nearly a month on Monday hit by COVID-19 curbs, while an inversion in the 10-year spread between domestic and US yields, and high domestic factory-gate and consumer inflation also weighed on sentiment.

The blue-chip CSI300 index fell 3.1% to 4,100.07, while the Shanghai Composite Index lost 2.6% to 3,167.13. Both indexes posted their biggest declines since March 15.

** Mainland China reported 1,184 new confirmed coronavirus cases and 26,411 new asymptomatic cases on April 10.

** “With the government doggedly sticking to its COVID-zero policy, fears are increasing that an extended lockdown in the country, which may spread to other major industrial cities, will darken an already cloudy outlook for China’s growth,” OANDA senior market analyst Jeffrey Halley said.

China stocks rise as weak factory data fans stimulus hopes

** Electric vehicle maker Nio Inc suspended production as China faces its worst coronavirus outbreak in two years, while battery giant Contemporary Amperex Technology (CATL) implemented a “closed-loop management” system at its main factory to keep production going.

** Shares of Nio dropped roughly 8% in Hong Kong, while CATL lost 7.3% in Shenzhen.

** EV makers in China produced far fewer cars in total than expected in March, due to strict pandemic curbs.

** Dampening sentiment further, China’s producer price index increased 8.3% year-on-year, easing from 8.8% growth in February. The consumer price index inched up 1.5% year-on-year, the fastest pace in three months.

** Also, yields on China’s 10-year government bonds fell below US Treasury yields for the first time in 12 years, raising concerns of less attractiveness of yuan-denominated assets.

** Outflows through the Northbound leg of Stock Connect totalled 2.87 billion yuan ($450 million), according to Refinitiv data.

** China will step up policy measures in a timely way to support the economy while studying new stimulus plans, state media on Friday quoted Premier Li Keqiang as saying.

** Shares of new-energy firms slipped 5.5%, new energy vehicles plunged 6.5%, while automobiles declined 4.7%.

** Stocks in semiconductors and non-ferrous metals tumbled roughly 5% each, while consumer staples and real estate developers lost 1.7% and 2.6%, respectively.