SHANGHAI: Mainland China and Hong Kong shares fell on Wednesday, as global monetary tightening and softer outlook for domestic economy in light of COVID-19 shocks weighed on sentiment.
** At the midday break, the Shanghai Composite Index was down 0.33% at 3,295.95 points, while the blue-chip CSI 300 index lost 0.44% to 4,306.32.
** The financial sector sub-index edged down 0.6%, the consumer staples sector eased 0.38%, while the real estate index fell 0.86%.
** A UBS survey of 507 senior corporate executives conducted in April and May showed that COVID-19 disruptions have caused more negative impact on corporate business than that in 2021, the bank said in a note.
** “Respondents reported softer outlook in H2/2022 with expectation for slower sales growth, lower profit margin, weaker domestic and export orders.”
** Some traders and analysts said markets will pay close attention to June economic indicators to gauge the pace of economic recovery, after financial hub of Shanghai lifted its two-month long lockdown at the start of this month.
** However, photovoltaic and green energy sectors outperformed the market, after power consumption in some provinces reached record highs.
** The consumption of electricity in the Chinese provinces of Shandong and Henan reached records this week, primarily driven by the use of air conditioning as heat waves spread across regions north of the Yangtze river.
** In Hong Kong, shares snapped a three-day rally, dragged lower by worries on global growth prospects, stubbornly high inflation and tighter financial conditions.
** The Hang Seng index dropped 1.24% to 21,291.75, while the Hong Kong China Enterprises Index lost 1.5%.
** Market participants will monitor US Federal Reserve chair Jerome Powell’s testimony to Congress later in the session, with investors looking for further clues about whether another 75 basis point rate hike is on the cards in July.
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