Chinese stocks fall as concerns about COVID-19 weigh on sentiment

SHANGHAI, Nov 26 (Reuters) – Chinese stocks fell on Friday as domestic COVID-19 cases and a new and potentially vaccine-resistant coronavirus strain weighed on investor sentiment, with semiconductor and energy stocks leading the decline.

The CSI300 Index (.CSI300) fell 0.6% to 4,865.00 by the end of the morning session, as the Shanghai Composite Index (.ssec) lost 0.5% to 3,566.18.

The Hang Seng Index (.HSI) decreased by 2.1% to 24,213.55. The Hong Kong China Enterprises Index (.HSCE) lost 2.1% to 8,626.31.

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** This week, the CSI300 index is down 0.5% while the Hang Seng index is down 3.3%. Hong Kong stocks will record their biggest weekly decline in 10.

** A handful of local COVID-19 cases in eastern parts of China have prompted the city of Shanghai to curtail tourist activity and a nearby city to shut down public transportation. read more

** That sent tourism stocks (.CSI930633) and consumer goods (.CSICS) respectively 1.6% and 0.6% lower.

** Meanwhile, the real estate subindex (.CSI000952), the energy subindex (.CSIEN), the semiconductor sub-index (.CSIH30184) fell between 1.3% and 2.8%.

** In the global market, the detection of a new and potentially vaccine-resistant coronavirus variant in South Africa deterred investors, forcing them to dump risky assets and flee to safe havens. read more

** Refinitiv data showed more than 1 billion yuan outflow through the northern stretches of the Stock Connect program (.NQUOTA.ZK), (.NQUOTA.SH), showing that foreign investors were net sellers of A shares.

** Morgan Stanley said it continues to favor A shares in the Chinese space and will wait for a better entry point.

** “Recent comments on policy easing and structural A-share inflows are positive, but earnings pressures continue and the cut in consensus estimates could take longer,” Morgan Stanley said in a note.

** Hong Kong stocks trailed global markets lower as the new COVID-19 variant weighed on sentiment.

**Tech Giants (.HSTECH) tumbled 2.6%, with Tencent Holdings (0700.HK), Meituan (3690.HK), and Alibaba Group (9988.HK) decreased between 3% and 4%.

** The Wall Street Journal reported Thursday that some Chinese state-owned companies were restricting employees’ use of Tencent’s messaging app Weixin, citing security concerns.

** Betting Stocks (.CSISCESG10) down 4.5%.

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Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu’

Our standards: The Thomson Reuters Trust Principles.

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