China stocks rebound on hope of slower rate rises; COVID lockdowns trim gains

HONG KONG, Oct 26 (Reuters) – China stocks had a strong start on Wednesday on hopes that the United States might slow its aggressive interest rate rises but the optimism was partially offset by new COVID-19 lockdowns in several parts of China.

** China’s blue-chip CSI 300 Index rose 0.81%. The Shanghai Composite Index edged up 0.78%, closing slightly below the key 3,000 level, to 2,999.5.

** Hong Kong’s Hang Seng Index rebounded 1%, ending a five-day losing streak, while the Hang Seng China Enterprises Index climbed 0.72%.

** Asian shares rose on Wednesday on hopes that the pace of global interest rate rises will soon start to slow.

** The Universal Resort theme park in Beijing temporarily shut because of COVID measures.

** Certain areas in several large Chinese cities including Shanghai and Wuhan, were reported to be under new partial lockdowns.

** Foxconn Technology Group confirmed that its iPhone factory, the world’s largest, in the central Chinese city of Zhengzhou, was dealing with a small COVID outbreak but said production remained “relatively stable”, the South China Morning Post reported.

** The People’s Bank of China (PBOC) and the State Administration of Foreign Exchange said they would strengthen collaboration to maintain the healthy development of the stock, bond and property markets, and stabilise the yuan at a reasonable and balanced level.

** Major Chinese state-owned banks sold US dollars in both onshore and offshore markets in late trade on Tuesday to prop up the weakening yuan, two sources with direct knowledge of the matter told Reuters.

** “Both Hong Kong and A-share stocks were oversold, we have seen investors coming back and buying in the dip this week as trading volumes are picking up,” said Linus Yip, chief strategist at First Shanghai Securities, adding that the decline in the 10-year U.S. treasury yield also boosted sentiment.

** In A-shares, healthcarE and IT-related stocks bounced back 5.6% and 3.5%, respectively.

** In Hong Kong, the Hang Seng Tech Index rallied for a second day after a brutal selloff on Monday, gaining 2.5%. Food delivery giant Meituan jumped 5.0%, while Tencent added 2.5%.

(USD 1 = 7.2864 Chinese yuan renminbi)

(Reporting by Summer Zhen; Editing by Rashmi Aich, Robert Birsel)