Chinese Stocks Slump as Covid Woes Outweigh Policy Push from buzai232's blog

Chinese Stocks Slump as Covid Woes Outweigh Policy Push

Chinese stocks slid as growing disruptions from Covid outbreaks hurt sentiment, offsetting the boost from a key policy meeting where authorities pledged growth support. To get more china business market news, you can visit shine news official website.

The CSI 300 Index retreated 1.5% in its biggest drop since Oct. 28, with health care and telecom sectors falling the most. The Shanghai Composite Index declined 1.9%, also capping its worst day since the reopening boost. Chinese shares trading in Hong Kong reversed earlier gains. A huge reopening rally in recent weeks has been giving way to more cautious trading, as investors come to terms with mounting economic disruptions from the Covid Zero pivot. Monday’s market setback came even as Chinese top officials pledged at the Central Economic Work Conference to revive consumption and support private businesses.

Although the CEWC delivered some meaningful and practical messages, investors are not too excited as the economy in the next three months is likely to be largely affected by the first and second wave of Covid breakout with the market to cool after a one-month rebound,” Jefferies Financial Group Inc. analyst Chen Shujin wrote in a note.

Economists said the outcome of the conference indicated the focus next year will be on boosting growth, with policy makers likely to target expansion of at least 5%. Beijing passed the first peak of infections over the weekend, with more than 40% of the population infected, Chen at Jefferies estimated, citing data from the Mini App “City Database.” Shanghai, Shenzhen and Guangzhou are similarly headed for a peak in cases.

However, equities may experience a second leg of rebound if traffic in Tier-1 cities recovers soon to validate the “success” of China’s “fast spreading, fast resumption” strategy, Chen added.