SHANGHAI: China shares retreated on Friday after rising for two straight days as investors kept a wary eye on the country’s response to contain the COVID-19 outbreak and the latest developments around Ukraine.
** At the midday break, the Shanghai Composite index was down 0.22% at 3,208.00 points and China’s blue-chip CSI300 index was down 0.89%. ** Chinese H-shares listed in Hong Kong fell 3.26% to 7,166.2, while the Hang Seng Index was down 2.38% at 20,988.53.
** “We are not in a rush to turn outright bullish at the index level,” Morgan Stanley analysts wrote in a note on Thursday. A clearer exit strategy from the zero-COVID policy, improvements in geopolitical tensions, and revival of the offshore IPO market are among the factors needed for a more sustainable rally, they added.
** Already vulnerable and weak after a prolonged regulatory crackdown, China’s stock markets were pressured further over the past couple of weeks by worries of a spurt in COVID-19 cases and fears that its close ties with Russia will draw Western ire or sanctions.
** The Hang Seng technology index has borne the brunt of the bearishness on China, with a decline of nearly 39% this year through Tuesday, before Vice Premier Liu He’s speech promising stability put a floor under markets. It had surged nearly 30% in previous two sessions but slumped 5.59% on Friday as some investors decided to lock in profits.
** Index heavyweights Alibaba Group, Tencent Holdings and Meituan lost between 4.4% and 8.3%, while video-platform provider Bilibili Inc tumbled 14.3%.
** The Hang Seng Mainland Properties Index retreated 4.36% following a two-day rally as well, with investors eyeing more supportive measures to be implemented and a liquidity crunch in the sector to be eased.
** Coal miners gained with the sub-sector index rose 2.73%, tracking rallies in the futures market as concerns on energy shortages continued along with the Ukraine-Russian crisis.
** China reported 2,388 new local COVID-19 cases with confirmed symptoms on March 17, official data showed on Friday, almost double the count a day earlier.
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