Mainland Chinese stocks inched down on Thursday as the economic uncertainty due to the coronavirus outbreak kept share prices under pressure
Mainland Chinese stocks inched down on Thursday as the economic uncertainty sparked by the coronavirus outbreak kept share prices under pressure, making investors reluctant to chase the previous session’s rebound.
At the midday break, the Shanghai Composite index was down less than 0.1% at 2,842.25. China’s blue-chip CSI300 index was down 0.2%, with its financial sector sub-index lower by 0.3%, the consumer staples sector up 0.5%, the real estate index down 0.2% and the healthcare sub-index down 0.3%. Chinese H-shares listed in Hong Kong rose 0.2%. The Hang Seng Index was also up 0.2%, at 23,948.03.
The smaller Shenzhen index was down 0.3% and the start-up board ChiNext Composite index was weaker by 0.5%. The Chinese economy will slowly recover from its first quarterly contraction since current records began, economists predicted in a Reuters poll, but they warned of a likely recession if conditions worsen again from the global coronavirus pandemic.
The poll found China’s gross domestic product (GDP) was expected to grow just 1.3% in the current quarter from a year earlier, after contracting 6.8% in January-March.
Bank of China said it suspended transactions to open new positions for its crude oil futures trading product from Wednesday onwards, following other banks in curtailing their energy product offerings and in light of “current market and delivery risks”.
Bank of Communications said it had suspended open positions for crude oil trading products starting on Thursday. The A-shares market lost a bit of steam after rebounding in the previous session, analysts at China Fortunes Securities wrote in a note, pointing to technical resistance above the 2,850 level for the Shanghai Composite Index.
Wednesday’s bounce “implies that the (Shanghai) index’s short-term advantage has disappeared. Observing trading in the past few weeks, investors mostly dared to buy into the bottom, but lacked enthusiasm in chasing the rally,” the analysts said.
Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.3%, while Japan’s Nikkei index was up almost 1%, as a combination of a rebound in crude prices from historic lows and the promise of more U.S. government aid to cushion the coronavirus-ravaged economy helped calm nerves. In Hong Kong, the sub-index of the Hang Seng index tracking energy shares rose 1.5%, while the IT sector fell 0.1%, the financial sector lost 0.2% and the property sector gained 0.8%.
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