SHANGHAI: China stocks retreated on Monday as investors worried that rising COVID-19 cases might disrupt consumption and manufacturing, while uncertainty over overseas monetary policy also kept sentiment subdued.
China’s blue-chip CSI 300 Index was down 0.8% by the end of the morning session, and the Shanghai Composite Index lost 0.6%.
Hong Kong’s Hang Seng Index dropped 1.9% while the Hang Seng China Enterprises Index declined 2.6%.
Other Asian shares also fell, as markets awaited a flurry of rate decisions from the US Federal Reserve, the European Central Bank and others.
Property developers and internet companies led declines in China’s market, as investors booked profits from previous bets on China’s policies to support the real estate sector and relax COVID restrictions.
Real estate developers’ shares slumped 4% in mainland China, while tech giants traded in Hong Kong plunged 3.3% on Monday. Both sectors rose more than 30% in November.
After China made a dramatic pivot toward economic reopening last week, there were rising concerns that infections could spike and cause further disruptions.
“Short-term pain in China’s reopening process might be inevitable, especially on the consumer side, but the subsequent recovery will be earlier and stronger,” said Robin Xing, Chief China Economist at Morgan Stanley.
However, shares in more than a score of drug makers surged, after China’s National Administration of Traditional Chinese Medicine published a lengthy list of recommended medicines, including cough and flu drugs, that people can use to cope with infections at home.
Shijiazhuang Yiling Pharmaceutical Co Ltd, seller of a wildly popular anti-cold medicine, rose roughly 2%.
Meanwhile, antigen testing firm Wuhan Easy Diagnosis Biomedicine jumped nearly 10%.
Investors are also eyeing the upcoming Central Economic Work Conference this month, which is expected to provide more clues on China’s economic policy next year.
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