China Stocks fall as COVID outbreaks

Mainland China share market finished lower for third straight session on Thursday, 10 November 2022, amid growing concerns over an economic slowdown as the country again grappling with a COVID surge, with the southern metropolis of Guangzhou reporting thousands of cases. Most sectors fell, with defence, tech and environment protection stocks leading the declines.

At close of trade, the benchmark Shanghai Composite Index declined 0.4%, or 12.03 points, to 3,036.13. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.98%, or 19.69 points, to 1,991.82. The blue-chip CSI300 index decreased 0.77%, or 28.58 points, to 3,685.69.

Market risk sentiments dented as persistent COVID disruptions and mobility restrictions have hurt domestic demand and weighed on the world's second-largest economy, with the International Monetary Fund cutting China's full-year growth forecast to 3.2% from 4.4% previously.

China reported 9,005 new COVID-19 infections for Nov. 9, including both symptomatic and asymptomatic cases, compared with 8,335 new cases a day earlier. In China's southern manufacturing hub of Guangzhou, millions of residents are being tested for COVID-19 in a fight against city's worst outbreak so far.

Apple Inc supplier Foxconn plans to update its fourth-quarter outlook on Thursday, after strict COVID curbs remained in place at its major plant in China despite the lifting of a lockdown.

Investors are closely monitor lockdown measures in Guangzhou due to the sheer size of the city and for insight into the future of China's zero-COVID policy. Market hopes for the relaxation of some pandemic restrictions lifted Chinese currency and stock markets last week. The Chinese government imposed a months-long lockdown on the financial hub of Shanghai earlier this year to curb the spread of the coronavirus.

CURRENCY NEWS: China's yuan eased against the dollar on Thursday, inline with softer midpoint fixing by China's central bank. Prior to market opening on Wednesday, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.2422 per dollar, 233 pips or 0.32% weaker than the previous fix 7.2189, and the weakest since Nov. 4. In the spot market, the yuan was changing hands at 7.2608, 168 pips weaker than the previous late session close.

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