SHANGHAI: China stocks closed lower in volatile trade on Thursday, as higher-than-expected US inflation in April sapped sentiment, despite declining COVID-19 cases and authorities’ repeated vows to support the economy.
The blue-chip CSI300 index fell 0.4% to 3,958.74, after rising as much as 0.2% in early afternoon trade, while the Shanghai Composite Index lost 0.1% to 3,054.99 points.
The Hang Seng index fell 2.2%, to 19,380.34, while the China Enterprises Index lost 2.6%, to 6,594.81 points.
Stocks fell across Asia as data showed US inflation persistently high, and investors worried about the economic toll of aggressive interest rate hikes to tame it.
Analysts including Morgan Stanley strategists said near-term market volatility would remain, due to China’s zero-COVID policy, geopolitical tensions, and US monetary tightening.
The number of new COVID-19 cases in china continued to decline, with the country reporting 1,917 new cases on Wednesday, compared with 1,927 a day earlier.
A senior official of China’s Communist Party said China will not hesitate to introduce new policies to prop up growth, aims to implement existing policies in the first half of the year and is ready to take new steps as and when needed.
China will strive to stabilise the economy and will use various policy tools to support employment, state media quoted the cabinet as saying on Wednesday.
“Unless incremental news keeps getting worse, China is currently positioned in a very good place for better performance going forward,” said Jian Shi Cortesi, investment director for China and Asian equities at GAM Investments.
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