China Stocks fall on fresh Covid outbreaks

Mainland China share market finished session lower on Tuesday, 08 November 2022, snapping a two-day winning streak, after data showed that Chinese exports and imports had unexpectedly contracted in October.

Also, risk averse sentiments fueled after reports that COVID-19 cases in the country surged at the sharpest rate since April, derailing a potential exit from Beijing's zero-COVID policy.

At close of trade, the benchmark Shanghai Composite Index fell 0.43%, or 13.32 points, to 3,064.49. The Shenzhen Composite Index, which tracks stocks on China's second exchange, dropped 0.4%, or 8.05 points, to 2,019.81. The blue-chip CSI300 index decreased 0.69%, or 25.97 points, to 3,749.33.

COVID-19 cases sharply escalated in Guangzhou and other major Chinese cities, official data showed on Tuesday, with the global manufacturing hub fighting its worst flare-up ever.

Also weighing sentiments toward market was trade data released on Monday that showed both China's exports and imports unexpectedly contracted in October - the first simultaneous slump since May 2020.

ECONOMIC NEWS: China's exports in October shrank 0.3% from a year earlier, a sharp turnaround from a 5.7% gain in September, according Chinese customs data released Monday. Imports declined 0.7% from a 0.3% gain in September. The overall trade figures resulted in a slightly wider trade surplus of $85.15 billion, compared with $84.74 billion in September.

CURRENCY NEWS: China's yuan eased against the dollar on Monday, despite firmer midpoint fixing by China's central bank. Prior to market opening on Monday, the People's Bank of China (PBOC) set the midpoint rate CNY=PBOC at 7.215 per dollar, firmer than the previous fix of 7.2292. In the spot market, the yuan was changing hands at 7.2381 per dollar at midday, 0.1% weaker than previous late session close.

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