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China shares fall sharply on concerns over Covid outbreak and Ukraine war

Shares in China fell 5 percent on Tuesday, hitting losses of nearly 20 percent in the new year in a new nervous breakdown amid Corona virus cases.

The Shanghai and Shenzhen CSI 300 shares closed down 4.6%, exacerbated by reports that Beijing signaled its willingness to provide Russia with military aid to support its invasion of Ukraine.

Hong Kong’s Hang Seng Index fell nearly 6% to its lowest closing level since 2016, while the city’s China Enterprises Index of Large and Liquid Chinese Shares fell 6.6%.

Companies with heavy exposure to the consumer and travel sectors carried the bulk of sales. The Bloomberg casino operators’ index in Macau fell more than 11%, for the second day in a row, and the China Real Estate Owners and Developers Index, an index of property developers, fell 10% to its lowest close in nearly a decade.

Concerns about the potential for further shutdowns spurred overseas investors to dump Chinese stocks at the fastest rate in 20 months on Tuesday, according to Financial Times calculations based on Bloomberg data. From $ 16 billion ($ 2.5 billion), bringing the total weekly sales to more than $ 30 billion.

The declines followed Sharp falls On Monday, when Chinese stocks in Hong Kong fell the most since 2008 thereafter Multiple cities Were locked, including the Shenzhen Technology and Manufacturing Center.

China reported more than 3,500 new cases on Monday, up from less than 1,400 the day before, which put pressure on Beijing’s ability to maintain its zero-cube approach.

Eric Lau, an analyst at Citi, said a one-week closure of individual cities would have a limited impact on most companies. But he warned that the disruptions would escalate “if the partial lock-up measures were extended and widened more widely to cover the entire nation.”

Also, the weight of sentiment, investors said, was a Report of the Financial Times That the United States told its allies that China was open to providing military assistance to Russia.

“If it’s the Americans who suggest there’s a risk that China is now supporting Russia, then it’s a message of ‘either you are with us or against us,'” said a Hong Kong fund manager at International Asset Management, adding “It was a difficult journey [for] Markets are already this week. “

Separately, the People’s Bank of China left interest rates on medium-term loans unchanged after most analysts expected the central bank to lower them by 0.1 percentage points in response to rising economic pressure and a disturbance caused by the rise of Cubid.

“When the near-term forecast darkens on several fronts, we think it’s only a matter of time until [PBoC] Re-lowering its interest rate, “said Julian Evans-Pritchard, a senior China economist at Capital Economics, which expects the central bank to cut interest rates by 0.2 percentage points in the first half of the year.

Another report by Tabby Kinder in Bangkok

China shares fall sharply on concerns over Covid outbreak and Ukraine war Source link China shares fall sharply on concerns over Covid outbreak and Ukraine war

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