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China stocks fall as property woes, COVID concerns weigh

August 23, 2022By Reuters

China stocks closed lower on Tuesday, as investors fretted that recent support measures were not sufficient to turn around the country’s beleaguered property sector, while rising COVID-19 cases and extended power curbs also dented sentiment.

The CSI300 Index  was down 0.5% at close, while the Shanghai Composite Index edged 0.1% lower.

The Hang Seng Index declined 0.8%, and the Hang Seng China Enterprises Index  lost 0.7%.

Real estate developers lost 1.4%, after closing almost flat in the previous session, even as China cut its benchmark lending rate and lowered the mortgage reference.

Meanwhile, Bloomberg reported China was planning to offer RMB 200 billion (USD 29.2 billion) in special loans to ensure stalled housing projects were delivered to buyers.

“The latest batch of policies will help, but they are still reactive and piecemeal,” Nomura said in a note. “Simply put, these supportive measures are not able to turn around the heavily hit property sector yet.”

Healthcare and liquor  stocks declined 1.4% and 1.6%, respectively.

Shares of energy firms rose 2.6% and photovoltaic companies added 1.4%.

“We think that it will continue to slide, given that the economy faces multiple challenges, including from its property sector,” Capital Economics analysts said in a note, referring to China’s stock market.

They also warned power shortages due to droughts in parts of the country looked set to hobble industries in the near term.

Some companies’ operations have been affected by the power curbs.

As of Sunday, 23 provinces and two municipalities actively recorded locally transmitted COVID-19 cases, according to Nomura.

Tech giants listed in Hong Kong edged down 0.3%.


(Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu and Sherry Jacob-Phillips)

This article originally appeared on reuters.com

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