China stocks retreat on coronavirus worries

China stocks retreat on coronavirus worries

China shares fell on Tuesday as a resurgence of COVID-19 cases hit market sentiment, with consumer discretionary and materials stocks leading the retreat.

The blue-chip CSI300 index fell 1.5% to 5,437.52, while the Shanghai Composite Index slipped 0.8% to 3,566.38.

The tech-heavy start-up board ChiNext sank 2.1%, while the STAR50 index shed 2.5%.

Leading the decline, the CSI300 consumer discretionary index dropped 2.9%, while the CSI300 materials index slid 2.7%.

China is battling the worst outbreak of COVID-19 since March 2020, with one province posting a record daily rise in cases, as an independent panel reviewing the global pandemic said China could have acted more forcefully to curb the initial outbreak.

China will provide necessary policy support for the economic recovery this year, to avoid a “policy cliff”, as small firms remain hard-pressed amid the pandemic, a senior official at the state planner said.

China’s economy picked up speed in the fourth quarter, with growth beating expectations as it ended a rough coronavirus-stricken 2020 in remarkably good shape and remained poised to expand further this year even as the global pandemic rages unabated.

Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.24%, while Japan’s Nikkei index closed up 1.39%.

At 0716 GMT, the yuan was quoted at 6.4884 per U.S. dollar, 0.06% firmer than the previous close of 6.4921.

As of 0717 GMT, China’s A-shares were trading at a premium of 34.71% over the Hong Kong-listed H-shares.

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