(Bloomberg) — Chinese stocks fluctuated after returning from a three-day break, as investors weighed Beijing’s vow to boost growth against strict Covid lockdowns and gloomy economic data.
The benchmark CSI 300 Index advanced 0.5% at the midday break Thursday, led by consumer shares, erasing earlier losses of as much as 0.7%.
Capping gains was a 14% plunge in battery giant Contemporary Amperex Technology Co. on disappointing earnings, as well as Hangzhou Hikvision Digital Technology Co. that tumbled 10% on the risk of fresh U.S.
sanctions.
The market’s late-morning rebound came after Shanghai authorities said more than 70% of the city’s industrial firms have resumed production as of Wednesday, an encouraging development for the regional economic powerhouse following a five-week lockdown.
In April, China’s services activity slumped to a two-year low.
The overnight rally on Wall Street failed to have a meaningful impact on Chinese shares, in a sign that the Fed’s latest rate hike and signaling of more to come this year continue to raise concerns about the allure of local assets.
“The focus currently is on daily cases and restrictions which is quite short term, where it is hard to have an edge,” said Joshua Crabb, a fund manager at Robeco Hong Kong Ltd. “If we think a little longer term, we do know that sooner or later, the lockdown will abate and we know that a lot of stocks are starting to look cheap – so it’s time to start looking where to add.”
China’s top leaders last week issued sweeping pledges to boost economic stimulus to spur growth, vowing to meet growth targets by deploying more policy tools and ramping up infrastructure construction.
Beijing also took pains to ease fears of an extended crackdown on private enterprise, especially on its once high-flying technology firms.
In the latest of such efforts, China’s central bank said it will implement “normalized” supervision on the financial activities of online platform companies, adding that support for technology innovation companies should be strengthened.
Elsewhere, the onshore yuan slipped 0.1% to 6.6059, while its offshore counterpart fell by as much as 0.3% to 6.6422.
Yields on China’s benchmark 10-year government bond shed one basis point to 2.83%.
In credit markets, Chinese onshore corporate bonds were generally higher, alongside gains in high-yield dollar notes.
Developers were some of the best performers.
(Updates prices and with analyst comments)
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