Economic news

China Shares End Lower as Inflation Risks, COVID Cases Mount

  • SSEC -1.1%, CSI300 -0.9%, HSI -0.7%
  • Hikes in global commodity prices deepen inflation worries
  • Mainland reports 337 new confirmed coronavirus cases

SHANGHAI, March 9 (Reuters) - Chinese shares ended lower on Wednesday, as investors remained on edge over concerns the commodity prices' rally would have a wider impact on the world's second-largest economy, while new domestic coronavirus cases also weighed on risk sentiment.

** China's blue-chip CSI300 index ended 0.92% lower at 4,226.35, the lowest close since June 30, 2020, after falling as much as 4.6% in the afternoon trade. The Shanghai Composite index was down 1.13% at 3,256.39.

** "Panic sell-offs" led to consecutive sharp falls, mainly due to external factors such as global inflationary risks as commodity prices reached decade-highs amid the conflict in Ukraine, said Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co.

** Sentiment was weak as investors expect the government to launch more measures to curb the spread of the virus, likely denting growth in the consumer sector, said Yang.

** China's factory inflation in February eased to the slowest annual pace in eight months due to seasonal effects from the Lunar New Year holiday, but analysts expect it to rise in the coming months because of surging global commodity prices.

** Shares of companies exposed to Tsingshan Holding Group, the Chinese nickel producer squeezed by the surge in the metal's prices, tumbled with Zhejiang Huayou Cobalt slumping nearly 10%.

** Tsingshan bought large amounts of nickel to reduce its short bets on the metal and its exposure to costly margin calls, turbocharging a record rally fuelled by the conflict in Ukraine, three sources familiar with the matter said. 

** Mainland China reported 337 new confirmed coronavirus cases on March 8, the country's national health authority said, compared with 325 a day earlier. 

** Foreign investors were net sellers of Chinese A-shares on Wednesday, with Refinitiv data showing outflows of more than 7.2 billion yuan ($1.14 billion) through the Stock Connect programme

** Foreign institutions dumped Chinese equities on fears sanctions on the Russian companies can be imposed on Chinese firms if geopolitical tensions keep escalating in this part of the world´╝îsaid Alex Au, managing director of Hong Kong-based hedge fund Alphalex Capital Management.

** Chinese companies that defy U.S. restrictions against exporting to Russia may be cut off from American equipment and software they need to make their products, U.S. Commerce Secretary Gina Raimondo told The New York Times. 

** The Hang Seng index slipped 0.67% to 20,627.71, after hitting the lowest level since June 28, 2016 in the afternoon. The Hang Seng China Enterprises index fell 0.67% to 7,189.58.

** The sub-index of the Hang Seng, tracking energy shares, dropped 1.5%, the financial sector ended 0.73% lower and the property sector slumped 1.72%.

** Around the region, MSCI's Asia ex-Japan stock index was firmer by 0.47%, while Japan's Nikkei index closed down 0.3%.

** The yuan was quoted at 6.3173 per U.S. dollar at 0815 GMT, 0.03% firmer than the previous close of 6.3195.

($1 = 6.3162 Chinese yuan)

Reporting by Shanghai and Hong Kong Newsroom; Editing by Subhranshu Sahu and Sherry Jacob-Phillips

Source: Reuters

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