SHANGHAI: Hong Kong stocks fell on Wednesday, despite eased coronavirus restrictions on the mainland, as concerns linger over the economic impact from Beijing’s tough zero-COVID policy.

Hong Kong’s Hang Seng Index lost 0.6%, while the Hang Seng Tech Index fell 1.1%.

China’s financial hub Shanghai sprung back to life on Wednesday after two months of bitter isolation under a ruthless COVID-19 lockdown.

It comes after China’s cabinet announced a package of 33 measures covering fiscal, financial, investment and industrial policies on Tuesday to revive its pandemic-ravaged economy.

“Much has been made of the ending of Shanghai restrictions today, with many seeming to think it offers an instant panacea to an Asian slowdown. Unfortunately, I must add a word of caution here,” wrote Jeffrey Halley senior market analyst, Asia Pacific OAND.

“China’s zero-COVID strategy has not suddenly gone away... any returning outbreaks in Beijing or Shanghai or Shenzhen etc, will put China back to square one.” “The outlook is more challenging in H2 as COVID policies remain broadly restrictive,” Peiqian Liu, China economist at NatWest Group wrote on Wednesday, adding that Chinese policymakers will face a policy trilemma: controlling debt, stabilizing growth and maintaining zero-COVID.

In Hong Kong, most sectors fell, with healthcare and commodity shares leading the decline.

However, Kristina Hooper, chief global market strategist at Invesco, said there could be an opportunity in Chinese stocks, whose valuations are very attractive. “In addition, I anticipate continued monetary policy accommodation and strong fiscal stimulus.”