Chinese stocks fell due to concerns over Beijing covid

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SHANGHAI – Chinese stocks closed Monday as Beijing reported 99 new COVID-19 cases – the highest daily number in the capital during the current outbreak – while profits after two consecutive weeks of gains also weighed on the benchmark.

The blue-chip CSI300 index was down 0.6% at 4,053.98, while the Shanghai Composite index was almost flat at 3,146.86 points.

The Hang Seng Index fell 1.2% to 20,470.06, while the China Enterprise Index fell 1.4% to 7,022.45 points.

** “The Shanghai Composite Benchmark has some resistance after rebounding more than 200 points from the recent trough,” said Zhang Yanbing, an analyst at Zheshang Securities.

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** “There are still some challenges in the market, and more positive fundamental catalysts are needed for further gains,” the CICC said in a note.

** Investors should keep a close eye on the fundamentals as China’s covid situation improves, including in the real estate sector and consumer demand, the CICC said.

** Real estate developers fell 3.8% to lead the fall, with both the tourism industry and winemakers losing more than 1.5%, while both non-ferrous metals and automobiles rose more than 2%.

** Chinese regulators on Friday said they would streamline the process of issuing equities and bonds by companies affected by the epidemic and called on brokerage and fund managers to provide more funding to virus-infected areas and sectors.

** Chinese healthcare companies have jumped on the bandwagon of monkeypox-related businesses, as the World Health Organization says it expects to detect more cases of the disease, although no monkeypox cases have been reported in China.

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** Larger Asian stocks are also under pressure as investors worry about rising inflation and rising interest rates will darken the outlook for the global economy.

** In geopolitics, China’s foreign ministry says the United States should not defend Taiwan’s independence, after US President Joe Biden said Washington would defend Taiwan militarily if Beijing invaded the self-governing island.

** Hong Kong-listed technology companies lost 2.5%, while e-commerce giant Alibaba and food delivery giant Maituan slipped more than 3%.

** Shares of Orient Overseas and China Hankiao Group have jumped more than 6% as they will be added to the Hang Seng benchmark.

(Reporting by Shanghai Newsroom; Editing by Simon Cameron-Moore and Lewis Heaven)