On Thursday, Chinese equities plummeted as portions of Shanghai began enforcing new COVID-19 limitations, with growth stocks leading the way as profit takers. By the end of the morning session, the CSI300 index had dropped 0.6 percent to 4,193.01, while the Shanghai Composite Index had dropped 0.5 percent to 3,247.86. The Hang Seng index fell 0.2% to 21,961.60 points. To 7,649.50, the Hong Kong China Enterprises Index fell 0.4 percent.
China’s exports grew at a double-digit pace in May, shattering expectations, while imports expanded for the first time in three months as Shanghai and Beijing relaxed curbs. To revive confidence among multinational companies, Shanghai officials are holding multiple meetings with foreign firms and easing a key border requirement for overseas workers.
Residents in Shanghai’s Minhang area have been told to stay at home for two days in order to reduce the danger of coronavirus transmission, with daily national COVID-19 instances increasing marginally this week. “The uncertainty over COVID outbreaks means Chinese equities are still likely to be susceptible to start-stop cycles,” BNP Paribas analysts said in a note.
Asian stocks fell as investors worried about the outlook for more rate rises ahead of a key meeting of the European Central Bank later in the day. Growth stocks that led a recent rebound dropped on profit-taking, with semiconductors tumbling nearly 3% and new energy down 1.4%. Real estate developers jumped 2.3% and banks rose 1.3%, while construction engineering companies edged up 1.1%.
Tech giants listed in Hong Kong edged down 0.8%, after jumping 4.8% on Wednesday following a series of positive developments in the sector. “While the market is still concerned about the regulation of data, but based on recent good news, the clampdown over the past year seems to come to an end,” said Linus Yip, chief strategist at First Shanghai Securities.
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