SHANGHAI: China stocks closed lower on Thursday on worries about aggressive rate hikes by the US Federal Reserve and as Washington sought to deter Beijing from aiding sanctions-hit Russia.
The blue-chip CSI300 index ended 0.6% lower at 4,251.31, while the Shanghai Composite Index lost 0.6% to 3,250.26 points.
The Hang Seng index fell 0.9% to 21,945.95, while the China Enterprises Index lost 1.4% to 7,528.14 points.
US Federal Reserve policymakers on Wednesday signalled they stand ready to take more aggressive action to bring down unacceptably high inflation, including a possible half-percentage-point interest rate hike at the next policy meeting in May.
The Biden administration on Wednesday warned Beijing not to take advantage of business opportunities created by sanctions, help Moscow evade export controls or process its banned financial transactions.
The United States will “absolutely” enforce export controls if Chinese companies send semiconductors to Russia that were made with U.S technology, a move that could “essentially shut them down.”
“Uncertainties like the Ukraine crisis and a hawkish Fed have not been eliminated, although China’s policy has reversed a downtrend in the market, the (rebound) process would be bumpy,” said Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co.
Chinese stocks rebounded from 21-month lows last week after the country’s top policymaker pledged to support the domestic economy and financial markets, while market participants are awaiting supportive measures to materialize.
The COVID-19 situation in the country continued to dent investor sentiment, with China reporting 2,054 new confirmed coronavirus cases on March 23.
Shares of real estate, consumer staples , tourism and new energy stocks fell roughly 1.5%.
Information technology and semiconductor stocks both lost more than 2%.
In the Hong Kong market, social media and gaming giant Tencent Holdings slumped nearly 6% after posting its slowest revenue growth since it went public in 2004, reflecting regulatory scrutiny that has hurt both its gaming business and advertising sales.
US securities regulator added Weibo Corp to a list of companies identified under the Holding Foreign Companies Accountable Act (HFCAA), becoming the sixth firm in the list facing delisting risks from the US Shares of Weibo closed down 1.7%, while the Hang Seng Tech Index ended 3% lower. Meituan tumbled 5.9%.
Index heavyweights Tencent and Meituan were two biggest constituents dragging down the Hang Seng benchmark.
Mainland developers trading in Hong Kong dropped 3.6%. China Aoyuan and Kaisa Group fell 9.8% and 11.8%, respectively.
Sunac China plunged 16.7% as the developer is planning to extend payment on a 4 billion yuan ($627.85 mln) onshore puttable bond and is in preliminary negotiations with large holders, Reuters reported.
ZTE Corp declined 9.2%, following a 23.1% jump in the previous session after the telecommunications equipment maker completed five years of probation in the US.