China Stocks tumble on COVID unrest

28 Nov 2022 , 04:28 PM

Mainland China share market finished session lower on Monday, 28 November 2022, as risk aversion selloff triggered with surge in coronavirus cases and protests against COVID restrictions fueled concerns over a slowdown in the worlds second-largest economy. At close of trade, the benchmark Shanghai Composite Index was down 0.75%, or 23.14 points, to 3,078.55. The Shenzhen Composite Index, which tracks stocks on Chinas second exchange, was down 0.51%, or 10.11 points, to 1,974.07. The blue-chip CSI300 index shed 1.13%, or 42.54 points, to 3,733.24. Market risk aversion selloff triggered as the social unrest in China has fuelled concerns over the social instability in the country and that the road to reopening could be a bumpy one. The COVID protests have flared across China and spread to several cities in the wake of a deadly fire in Urumqi in the countrys far west, with hundreds of demonstrators and police clashing in Shanghai on Sunday night. Worries over the unprecedented wave of civil disobedience in a country where in-person protests are rare, the rising COVID cases, as well as how Beijing will react to the situation kept investors on edge. Meanwhile, daily new COVID cases in China reached a record high, with more than 40,000 new infections being reported for Sunday, prompting widespread lockdowns and other curbs on movement and business across the country. Investors shrugged off the central banks announcement on Friday on cutting banks required reserve ratio (RRR) to aid a struggling economy. On Friday, the Peoples Bank of China (PBOC), the nations central bank, said it would cut the reserve requirement ratio (RRR) for banks by 25 basis points (bps), effective from Dec. 5. Shares fell across the board in mainland markets, with sectors from consumer staples and financials to non-ferrous metal led losses. Shares in Chinese surveillance equipment maker Dahua Technology Co, video surveillance firm Hangzhou Hikvision Digital Technology Co Ltd and telecoms firm Hytera Communications Corp Ltd dropped, following a sales ban by the Biden Administration. Powered by Capital Market – Live News