China Stocks end lower on COVID woes

Mainland China share market finished session slightly below neutral line on Wednesday, 21 December 2022, as investors sentiment remained depressed due to growing concern about the impact of the rapid spread of COVID-19 on the economy and trade.

At close of trade, the benchmark Shanghai Composite Index dropped 0.17%, or 5.36 points, to 3,068.41. The Shenzhen Composite Index, which tracks stocks on China's second exchange, fell 0.47%, or 9.29 points, to 1,969.79. The blue-chip CSI300 index edged up 0.04%, or 1.52 points, to 3,830.54.

COVID-19 cases have surged in China since stringent restrictions were lifted earlier this month and, given the country's financial might, there are concerns about the possible impact on the global economy. China began dismantling its zero-COVID policy of lockdowns and testing after people protested against the curbs which kept the virus at bay among its 1.4 billion-strong population at a big cost to its economy, the world's second largest.

Market risk sentiments dampened as cases are soaring across China and hospitals are struggling to keep up, with authorities conceding they can no longer accurately track cases. China's National Health Commission (NHC) has reported about 16,000 new COVID cases in the past week, but the World Health Organization (WHO) puts that figure closer to 150,000. The WHO says it has received reports of 443 deaths in the week to Tuesday, compared to just seven reported officially by China.

The World Bank on Tuesday cut its China growth outlook for this year and next, citing the "ups and downs of the pandemic" alongside other factors including a shaky property sector.

CURRENCY NEWS: The Chinese currency declined against the U.S. dollar on Wednesday, despite firmer mid-point fixing by central bank. Prior to the market's opening, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 6.965 per dollar, 211 pips, or 0.3%, firmer than the previous fix of 6.9861. In the spot market, the onshore yuan CNY=CFXS opened at 6.9705 per dollar and was changing hands at 6.9706 at midday, 96 pips softer than the previous late session close.

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