SHANGHAI: China and Hong Kong stocks fell on Thursday, tracking subdued Asian peers, hit by concerns over rising COVID-19 infections in China and disappointing economic data and the US Federal Reserve projecting higher interest rates for a longer period.
China also reported worse-than-expected factory output and retail sales data for November, underscoring the impact of widespread COVID curbs. China’s blue-chip CSI300 Index dipped 0.2% by the midday break, while the Shanghai Composite Index fell 0.3%.
Hong Kong’s Hang Seng Index dropped 1.1%. Major Chinese cities including the capital Beijing continue to grapple with a surge in infections, after the country dropped strict zero-COVID restrictions last week. China reported worse-than-expected factory output and retail sales data for November, underscoring the impact of widespread COVID curbs.
“As China reopens its economy, the economic activities inevitably slow, but experience from other countries show this slowdown is temporary,” wrote Zhiwei Zhang, chief economist at Pinpoint Asset Management.
Investors largely ignored government’s newly-published plans to expand domestic consumption and investment.
Risk appetite is curbed by another rate increase by the Fed, which vows to deliver more hikes next year even as the economy slips towards a possible recession.
Chinese property shares fell in both Hong Kong and the mainland, after Beijing’s new growth plan reiterated that “housing is for living, not for speculating”, dashing hopes of a policy reversal.
“We see a lot of selling interests on our side to sell Chinese property names,” said Tareck Horchani, head of dealing, Prime Brokerage, Maybank Securities in Singapore.
China stocks gain on easing COVID curbs, softer US inflation data
But some Chinese vaccine stocks jumped as the government works to boost vaccination, especially among the elderly.
Shares of China Meheco Group surged the maximum 10% in Shanghai, after the Chinese drug seller signed an agreement, with Pfizer Inc to import and distribute the US drugmaker’s oral COVID-19 treatment Paxlovid in mainland China.
Shares of Zhejiang Huahai, which signed a deal with Pfizer in August to produce Paxlovid in China for local patients, jumped 3.7%.
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