China, HK stocks dip as investors shun risks amid gloomy economic outlook

Beijing/Shanghai, April 22

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China and Hong Kong stocks edged lower on Wednesday as investors worried over how long it would take the Chinese and global economies to recover from the damage wrought by the coronavirus pandemic and tough lockdown measures.

** At the midday break, the Shanghai Composite index was down 0.16% at 2,822.57 points.

** China’s blue-chip CSI300 index was down 0.08%, with its financial sector sub-index dropped 0.55%, the consumer staples sector up 1.91%, the real estate index down 0.91% and the healthcare sub-index up 0.65%.

** Chinese H-shares listed in Hong Kong fell 0.33% to 9,583.27, while the Hang Seng Index was down 0.56% at 23,659.61.

** In Hong Kong, the sub-index of the Hang Seng index tracking energy shares dropped 2%, while the IT sector rose 0.5%.

** The smaller Shenzhen index was down 0.11% and the start-up board ChiNext Composite index was weaker by 0.38%.

** “The panic is over as the pandemic is gradually brought under control with economic activities restarting but investors are still cautious,” said Tian Weidong, an analyst with Kaiyuan Securities. “As long as the schools are not open and cinemas are still closed, the economy is not likely to recover fully.”

** Global business leaders are preparing for a drawn-out U-shaped recession due to the impact of the coronavirus and many fear their companies won’t survive the pandemic, a survey of thousands of chief executives showed.

** Chinese sales managers are reporting a recovery in production but a lack of demand, according to the latest Sales Managers Index (SMI) survey for April.

** “China’s state-led industrial and financial sectors give it some advantages in sustaining employment and keeping credit flowing, but the economy is at least a year from returning to its pre-virus path,” Capital Economics said in a note on Wednesday, predicting fiscal support will be significantly expandd.

** China reported 30 new coronavirus cases on Wednesday, 23 of which were so-called imported cases involving travellers from overseas, up from 11 a day earlier.

** Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.31%, while Japan’s Nikkei index was down 1.15%.

** Plunges in US oil prices earlier this week have hurt outlook for economy recovery, snapping risk sentiment in the stock market globally.

** The yuan was quoted at 7.0852 per U.S. dollar, 0.1% firmer than the previous close of 7.0925. Reuters