SHANGHAI — Hong Kong stocks slipped as soaring COVID cases in China disrupted economic activity and dented investor sentiment, while concerns over a hawkish U.S. Federal Reserve also dragged on regional markets amid subdued Chinese equities.
** China’s blue-chip CSI 300 Index and Shanghai Composite Index were little changed by the end of the morning session.
** Hong Kong’s Hang Seng Index lost 0.5%, and Hang Seng China Enterprises Index declined 1.1%.
** For the week, the CSI 300 Index was down 3% so far, while the Hang Seng Index edged up 0.6%.
** Other Asian shares eased, tracking a dive on Wall Street, while the dollar firmed as strong U.S. data revived fears the Fed will have to retain its hawkish stance to tame inflation.
** China is expecting a peak in COVID-19 infections within a week, a health official said, with authorities predicting extra strain on the country’s health system even as they downplay the disease’s severity and continue to report no new deaths.
** “As China moves toward reopening, economic activities have slowed down significantly amid national outbreaks, and this weighs on investor sentiment,” said Morgan Stanley analysts in a note.
** Shares in semiconductors lost 1.7%, new energy declined 1.3%, while consumer staples added 1%.
** Tech giants listed in Hong Kong retreated 1.9%.
** “We don’t think the rebound is finished, while the market will focus more on the implemention of policies and the recovery of fundamentals,” said Max Luo, director of asset allocation at UBS Asset Management in China, expecting more chances in China market in 2023. (Reporting by Shanghai Newsroom; Editing by Rashmi Aich)