SHANGHAI: China stocks ended down on Tuesday after hitting two-year lows in the previous session, as rising cases in Beijing cloud growth prospects of the world’s second-largest economy, while Hong Kong shares edged up as tech companies gained.
The blue-chip CSI300 index closed 0.8% lower at 3,784.12, while the Shanghai Composite Index lost 1.4% to 2,886.43 points.
The Hang Seng index rose 0.3% to 19,934.71, while the China Enterprises Index gained 0.9% to 6,747.42 points.
Three-quarters of Beijing’s 22 million people lined up for COVID-19 tests on Tuesday as authorities in the Chinese capital raced to stamp out a nascent outbreak and avert the debilitating city-wide lockdown that has shrouded Shanghai for a month.
“This week, market attention will likely shift from Shanghai to Beijing, as a worsening COVID-19 situation in China capital city could have a more profound influence on the future path of zero-COVID strategy,” said Nomura in a note.
Analysts also worried that larger scale of outbreaks and China’s adherence to zero-COVID policy would further disrupt supply chains, cloud growth outlook and dent investor sentiment.
China should attach great importance to the economic impact from domestic and external factors that have exceeded expectations, Premier Li Keqiang said, adding that policy measures that have already been drawn up need to be implemented in the first half to stabilise jobs, prices and fundamentals.
Meanwhile, China’s central bank said it would step up prudent monetary policy support to the real economy, especially to small firms hit by COVID-19, keep liquidity reasonably high and boost healthy and stable development of the financial markets.
According to Nomura, there are 46 cities that are currently implementing full or partial lockdowns, or some kinds of district-based control measures, accounting for 24.3% of China’s population and 35.1% of the country’s GDP.
Real estate developers rose 1.2% as several Chinese developers attended talks with China’s central bank last week to discuss the sale of distressed assets and other ways to support the sector that has been battered by defaults, sources said.