Chinese stocks fall amid Covid-19 surges, even as tensions in Taiwan ease

SHANGHAI (Aug 12): Chinese stocks fell on Friday August 12 as domestic Covid-19 cases rose sharply, although the blue chip index snapped a five-week losing streak as tensions geopolitics about Taiwan have calmed down.

Hong Kong stocks rose, driven by tech games.

The CSI 300 index lost 0.1% but was up 0.8% for the week, after posting five straight weekly losses. The Shanghai Composite Index fell 0.2%.

In Hong Kong, the Hang Seng Index and the Hong Kong Chinese Enterprise Index gained 0.5%.

The number of daily Covid-19 cases rose to more than 2,000 on Wednesday and Thursday, from around 1,000 previously.

“The resurgence of Covid-19 continues to weigh on market confidence in the macroeconomic recovery despite the continued recalibration of containment policy,” Morgan Stanley analysts wrote in a note.

“Continued uncertainty in the housing market could also potentially delay the bottoming of the macro economy,” they added.

Defense stocks fell 2.4% on Friday, but were still up nearly 3% for the week amid geopolitical tensions.

Energy shares rose more than 2%, while real estate developers added 1.3%.

Most other sectors remained tepid. Information technology stocks lost 1.5%, while new energy stocks fell 1.6%.

Property developers in mainland markets in Hong Kong gained 0.3% as confidence in the sector recovered somewhat after Longfor Group denied rumors that it had missed payment on commercial paper.

Hong Kong-listed tech companies edged up 0.5%, with index heavyweights Alibaba and Meituan rising more than 1% each.

Chinese sportswear group Li Ning Co jumped nearly 5% as its first-half net profit and revenue jumped.

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