fbpx

Type to search

China Stocks Slump on US Rate Hike, Rising Covid Cases

The Hang Seng index fell 3.1% by the close of trading, while on the mainland, the bluechip CSI300 index was down 0.8%


China stocks slipped on Tuesday
Investors had recently placed bets on hopes that China would adjust its zero-Covid policy. Photo: Reuters

 

Chinese and Hong Kong stocks slumped on Thursday after another US interest rate hike and concern over rising Covid-19 cases on the mainland.

The Hang Seng index dropped 3.1% to 15,339.49 at the close of trading, wiping out gains from Wednesday, while the Hong Kong China Enterprises Index lost 3.5%.

On the mainland, the bluechip CSI300 index recovered after falling 1.2% to be down 0.8%, to 3,647.90 at the close, while the Shanghai Composite Index slipped by 0.2% to 2,997.81.

Markets were weak in Asia, tracking losses overnight on Wall Street following the US Federal Reserve’s latest rate increase of 75 basis points.

The Fed undermined global sentiment by shifting its outlook on tightening from short and sharp to long and high, killing any thought of a near-term pause.

The market was not helped by a private sector business survey showing China’s services activity contracted again in October amid fresh Covid outbreaks.

ALSO SEE: Tesla Shuts Beijing Showroom And Changes Retail Strategy

 

 

 

Covid Count Rises

Meanwhile, electric vehicle maker NIO said it had suspended production in the eastern city of Hefei amid rising Covid cases and Yum China, operator of the KFC and Pizza Hut chains, said it was temporarily closing or reducing services at over 1,000 of its restaurants in China.

China recorded 3,200 daily local Covid cases for November 2, the highest level in two and a half months, official data showed on Thursday.

In Hong Kong, stocks fell across the board, as the city’s central bank raised rates following the Fed move.

Most sectors fell in China too, but the tech-focused STAR Market rose 1.1%, while defence stocks remained buoyant.

 

  • Reuters with additional editing by Jim Pollard

 

NOTE: This report was updated with details after the close of trading on November 3, 2022.

 

 

ALSO SEE:

 

EV Maker Nio and Yum China The Latest Zero-Covid Victims

 

Hong Kong Banks on China Links to Restore Global Status

 

 

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

logo

AF China Bond