China, Hong Kong shares slump as Beijing ramps up COVID measures

SHANGHAI: China shares fell on Tuesday while Hong Kong’s benchmark index also slumped, as stricter COVID-19 measures in the country’s capital reignited worries over slowing growth despite Beijing’s pledges of further economic support.

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** At the close of trade, Hong Kong’s Hang Seng index was down 357.96 points or 1.75% at 20,112.10. The Hang Seng China Enterprises index fell 1.98% to 6,883.14.

** The Shanghai Composite index ended 2.41% lower at 3,070.93, posting its biggest drop since April 25.

** The blue-chip CSI300 index was down 2.34%, its biggest drop since May 6, with its financial sector sub-index lower by 1.49%, the consumer staples sector down 1.45%, the real estate index down 0.27% and the healthcare sub-index down 3.7%.

** Tech firms, which have led a market rebound since late April, fell sharply. The CSI Info Tech index slipped 4.23% and Shanghai’s tech-focused STAR50 index dropped 4.73%.

** The smaller Shenzhen index ended 3.54% lower and the start-up board ChiNext Composite index fell 3.82%.

** Automotive shares fell less than the broader market, with a sub-index tracking the sector falling 1.1%, after China said it would reduce some passenger car purchase taxes by 60 billion yuan.

** The news helped to lift Geely Automobile Holdings Ltd , which jumped 3.52% and was the top gainer on the Hang Seng.

** The tax reduction is among a number of steps China’s cabinet has pledged to support an economy wracked by widespread COVID-19 outbreaks that are hobbling an already-slowing economy.

** Chinese Vice Premier Sun Chunlan called for more thorough measures to cut virus transmission and adhere to the nation’s zero-COVID policy during an inspection tour in Beijing.

** Daily COVID-19 numbers in China remain closely watched by investors and Beijing on Monday reported 99 new infections for the previous day, the largest daily tally so far during a month-old outbreak.

** Foreign investors were net sellers of A-shares on Tuesday, with Refinitiv data showing outflows of more than 6.6 billion yuan ($988.85 million) through the Stock Connect programme.

** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 1.25%, while Japan’s Nikkei index closed down 0.94%.

** The yuan was quoted at 6.6686 per US dollar at 0814 GMT, 0.3% weaker than the previous close of 6.6488.