China stocks cut losses on capital market reform hopes

China stocks fell sharply in early trade on Friday after Wall Street dived on fears of a COVID-19 resurgence, though they regained most of the ground following Beijing's pledge to push forward with capital market reforms. ** At the midday break, the Shanghai Composite index was down 0.38% to 2,909.73，while the blue-chip CSI300 index was down 0.45%.

China stocks fell sharply in early trade on Friday after Wall Street dived on fears of a COVID-19 resurgence, though they regained most of the ground following Beijing's pledge to push forward with capital market reforms.

** At the midday break, the Shanghai Composite index was down 0.38% to 2,909.73，while the blue-chip CSI300 index was down 0.45%. ** Both indexes fell as much as 1.7% soon after the market started trading.

** Wall Street tumbled on Thursday over growing concerns that a resurgence of coronavirus infections could stunt the pace of recovery in economies reopening from lockdowns. ** However, investors in the A-share market were encouraged after Beijing said it would publish reform policies for the Shenzhen start-up board to bolster its capital markets.

** The reforms are part of Beijing's continued efforts to seek tech self-sufficiency following its launch of STAR Market last July. ** The start-up board index inched up 0.1% by midday.

** "Chances for a second wave of coronavirus outbreak are relatively low for us, while liquidity conditions are good at the moment," said Liu Hongming, fund manager at Beijing-based Dingxin Huijin Asset Management Company. ** Liu attributed the calmness in China's onshore stock market to a more modest rally in A-shares compared with their U.S. peers.

** Chinese H-shares listed in Hong Kong fell 1.43% to 9,802.78, while the Hang Seng Index was down 1.3% to 24,162.78. ** Around the region, MSCI's Asia ex-Japan stock index was weaker by 1.50%, while Japan's Nikkei index was down 0.70%.

** The yuan was quoted at 7.0848 per U.S. dollar, 0.29% weaker than the previous close of 7.064.