China, HK stocks drop on COVID flare-ups; energy shares tumble

6/7/2022 12:56

        China and Hong Kong stocks dropped on Wednesday as the country continued to grapple with COVID-19 flare-ups, while energy shares tracked a sell-off in the global oil market. ** The blue-chip CSI300 Index lost 1.3% by the lunch break, while the Shanghai Composite Index also fell 1.3%. In Hong Kong, benchmark Hang Seng Index weakened 1.4%. ** China is fighting a COVID-19 resurgence on multiple fronts across the country including an emerging cluster in Shanghai, spurring mass testing drives and fresh restrictions. ** Shanghai, which lifted its two-month lockdown in early-June, is testing all residents in nine of its 16 districts from Tuesday to Thursday as well as those in parts of three other districts. ** "The flare-ups in places like Shanghai and Anhui contributed to the stock market weakness," said Zhiwei Zhang, president and chief economist at Pinpoint Asset Management. ** However, he pointed that the market had expected possible increase in infections, so there're n
        o signs of panic-selling. ** Zhang also predicted higher volatility ahead as the pace of China's economic recovery will likely slow. ** Energy shares tumbled more than 5% in both China and Hong Kong, after a slump in global oil prices amid fears of economic recession. ** Most sectors fell in both markets. ** China's property shares dropped 3.6%, while resources shares fell 2.9%. ** Tech shares were the only bright spot on the mainland, with the tech-focused STAR50 Index rising 1.3%, led by chipmakers.