SHANGHAI: China stocks closed lower on Tuesday, with foreign investors dumping the most shares in more than a month, as rising COVID cases and fresh property woes clouded the prospect of an economic recovery.
The blue-chip CSI300 index fell 0.5% to 4,269.34, while the Shanghai Composite Index was almost flat at 3,279.43.
The Hang Seng index fell 0.9% to 20,661.06, while the China Enterprises Index lost 1.0% to 7,097.39.
Asian shares slipped, following overnight declines on Wall Street, while traders’ main focus was approaching central bank meetings and the early stages of the US earnings season.
Foreign investors sold 9.86 billion yuan ($1.46 billion) of China shares through the stock connect scheme, the largest amount since June 13.
Nomura said 41 Chinese cities were currently implementing full or partial lockdowns or some kind of district-based control measures, affecting 22.8% of the country’s gross domestic product.
“The COVID-19 outbreaks dent market sentiment to some extent, but the main concern is still the sustainability of an economic recovery, while there are also worries over the slowing property sector,” said Wang Mengying, a stock index futures analyst at Nanhua Futures.
She said market participants’ focus would be on the July Federal Reserve meeting and China’s property sales for the month.
China may allow homeowners to temporarily halt mortgage payments on stalled property projects without incurring penalties, Bloomberg News reported.
The report comes as growing numbers of homebuyers have threatened to halt mortgage payments until developers resume construction of pre-sold homes, deepening concerns about the property sector, which accounts for a quarter of the economy, and raising fears banks could face hefty write downs.
Meanwhile, US House of Representatives Speaker Nancy Pelosi plans to visit Taiwan in August, the Financial Times reported.