Chinese stocks fall as Cenbank keeps rate steady amid COVID restrictions

Content of the article

SHANGHAI — Chinese stocks fell on Friday, led by losses in tech and auto stocks after the central bank kept key rates unchanged, even as the economy grapples with its worst coronavirus outbreak in more than two years.

** China’s blue-chip CSI300 index fell 0.4% at the lunch break, while the Shanghai Composite index lost 0.6%. Shanghai’s tech-focused STAR Market and Shenzhen’s ChiNext start-up board both fell more than 1.5%.

** The Hong Kong market is closed on Friday for a public holiday.

Advertisement 2

Content of the article

** China’s central bank kept borrowing costs for its medium-term political loan unchanged for the third month in a row, despite Beijing’s call for more monetary stimulus to cushion an economic slowdown.

**Investors are increasingly concerned about the economic cost of China’s zero COVID policy, which has placed the financial hub of Shanghai and a dozen other cities under full or partial lockdown, disrupting economic activity.

** “The People’s Bank (PBOC) missed the opportunity to lower its key rates today. This is somewhat surprising given the deep economic downturn and recent calls from Chinese leaders for monetary support,” wrote Julian Evans-Pritchard, senior China economist at Capital Economics.

Advertisement 3

Content of the article

** “This underscores the central bank’s reluctance to aggressively ease policy. But we believe it will have no choice but to do more before long.

** Auto stocks fell more than 2%.

** China’s anti-COVID-19 restrictions are clogging highways and ports, stranding workers and closing countless factories – disruptions that ripple through global supply chains.

** Bucking the trend, real estate and infrastructure stocks rose amid signs that China is easing property restrictions to reinvigorate its struggling economy.

**Healthcare stocks are also on track as investors bet the sector will benefit from the pandemic as drugmakers scramble to develop anti-COVID drugs. (Reporting by Shanghai Newsroom; Editing by Rashmi Aich)



Postmedia is committed to maintaining a lively yet civil discussion forum and encourages all readers to share their views on our articles. Comments can take up to an hour to be moderated before appearing on the site. We ask that you keep your comments relevant and respectful. We have enabled email notifications. You will now receive an email if you receive a reply to your comment, if there is an update to a comment thread you follow, or if a user follows you comments. See our Community Guidelines for more information and details on how to adjust your email settings.

Garland K. Long