Chinese stock markets fall amid concerns over pandemic and external turmoil
Scholarship Photo credit: VCG
China’s stock markets continued to fall on Tuesday, with major indexes hitting their lowest point this year, weighed down by external turmoil and domestic coronavirus outbreaks.
The blue-chip CSI300 index fell 2.01% to 4,265.39 points at the end of Tuesday’s session, while the Shanghai Composite Index was down 2.35%. The Shenzhen Component Index lost 2.62% and China’s growth enterprise market fell 1.8%. The Hang Seng index fell 1.39% to 20,765.87 points.
Trade value in the Shanghai and Shenzhen markets reached 1,109.9 billion yuan ($175.69), up 95.3 billion yuan from the previous session. In total, more than 4,100 stocks fell on Tuesday, with nearly 100 stocks falling below the 10% daily limit.
Stocks related to China’s East-West IT Resource Transfer project rose, as did those in the precious metals sector, while the big losers were COVID-19 treatment, assisted human reproduction (AHR), traditional Chinese medicine, planting and forestry, and lithium mining stocks.
The Securities Times said in a commentary on Tuesday that China’s policies aimed at stabilizing economic growth could create a strong outcome for the country’s A-share markets after China’s blue chip index closed at the lowest level since. July 2, 2020 Monday.
The sharp drop in the A-share market was closely associated with the international capital market turmoil, analysts said.
The Ukraine crisis has pushed up the prices of crude oil, natural gas and gold and investors have become more risk averse, pushing up inflation and sparking fears of global stagflation, Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co told the Global Times on Tuesday.
“The latest fall has caused panic among investors, but China’s economic fundamentals are still strong and healthy,” Yang said.
The government work report set an annual growth target of 5.5 percent for the year, aiming to achieve stable economic growth through proactive fiscal policy and loose monetary policy, Yang noted, adding that investment in infrastructure should increase.
From the perspective of economic fundamentals, the biggest uncertainty lies in the impact of COVID-19 on consumption and normal economic activity, Yang said.
It will be important to implement science-based and precise epidemic prevention and control measures, as highlighted in the government report, he added.