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China stocks tentative, Hong Kong up after China reaffirms strict COVID policy

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SHANGHAI — Stocks in China were tentative, and they rose in Hong Kong in early trading on Monday, even after Chinese officials reiterated their commitment to a strict COVID containment approach, dashing hopes for a quick re-opening of the economy.

Both the CSI300 index and the Shanghai Composite Index opened roughly 0.3% lower, but was then fluctuating between positive and negative territories. At 2:00 GMT, the CSI300 fell 0.1 % while the SSEC lost 0.1 %.

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The Hang Seng index reversed earlier losses and was up roughly 2%.

China will persevere with its “dynamic-clearing” approach to COVID-19 cases as soon as they emerge, health officials said on Saturday.

Chinese and Hong Kong stocks surged last week, as investors pumped a trillion dollars into the market on hopes of a reopening in the world’s second-biggest economy.

Goldman Sachs said in a note to clients that Chinese stocks could rally 20% on and before the reopening, as equity markets tend respond about a month in advance of policy changes and the positive momentum typically lasts for two-three months. (Shanghai newsroom Editing by Shri Navaratnam)

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