China, Hong Kong stocks languish near recent lows on COVID policy woes

SHANGHAI: China and Hong Kong stocks extended losses on Wednesday to hover around recent lows, as Beijing’s repeated vows to stick with its zero-COVID strategy dented sentiment, even as data showed China’s loan growth beat expectations.

** The blue-chip CSI 300 Index had lost 1.4% by the end of the morning session, hitting its lowest since March 2020, while the Shanghai Composite Index was down 1.2%.

** The Hang Seng Index declined 2%, hovering around 11-year lows, while the Hang Seng China Enterprises Index retreated 2.1%.

** Asian stocks wallowed at two-year lows, after a strengthening dollar, instability in the U.K. bond market, and upcoming US inflation data spelled a wild session on Wall Street and further volatility for investors.

** China will persist with its COVID-19 policies to avoid losing control over local coronavirus outbreaks, the official newspaper of the ruling Communist Party warned in commentary for the third straight day.

** “Lying flat is not to be advised, and to win (the COVID battle) while lying flat is not possible,” People’s Daily wrote.

** Big Chinese cities including Beijing and Shanghai have tightened preventive measures in recent days as domestic case numbers surge.

Hong Kong stocks close lower again

** Healthcare firms lost 2.8%, consumer staples went down 2.3%, and tourism-related companies plunged 3%.

** New bank lending in China nearly doubled in September from the previous month and far exceeded expectations after the central bank acted to spur an economy weakened by a property crisis and a resurgence of COVID-19 cases.

** “Chinese A-shares went lower despite positive credit data, it shows that market sentiment is quite weak,” said Wang Mengying, a stock index futures analyst at Nanhua Futures.

** She said consumer services-related shares led the decline, indicating that pandemic control had become the main worry for investors.

** In Hong Kong, tech giants plunged 3.3%, and casino operators slumped 5%.

** Index heavyweights Alibaba and Meituan were down more than 4% each to become the biggest drags on the Hang Seng.