China stocks close lower as virus worries, Fed rate hike bets weigh

China stocks closed lower on Tuesday as expectations of quicker U.S. Federal Reserve interest rate hikes and domestic COVID-19 outbreaks weighed on sentiment, with defence and information technology stocks leading the decline.

China stocks closed lower on Tuesday as expectations of quicker U.S. Federal Reserve interest rate hikes and domestic COVID-19 outbreaks weighed on sentiment, with defence and information technology stocks leading the decline. The blue-chip CSI300 index fell 1.0% to 4,797.77, while the Shanghai Composite Index lost 0.7% to 3,567.44.

** Some of Wall Street's biggest banks now expect the Fed to raise interest rates four times this year https://www.reuters.com/markets/us/wall-street-banks-see-four-us-hikes-2022-inflation-is-wild-card-2022-01-10, and Goldman Sachs sees the U.S. central bank beginning the process of reducing its balance sheet size as soon as July. ** Overseas investors sold more than 4 billion yuan of A-shares through the Stock Connect programme on Tuesday, according to data from East Money Information Co.

** The defence sector slumped 3.3%, while the information technology sub-index, consumer staples and automobiles retreated between 2% and 2.6%. ** China is battling with its latest local COVID-19 outbreaks, and the Omicron variant has been detected in at least three provinces.

** Real estate developers gave up gains in the morning session to end 0.1% lower. ** Some banks rose on robust 2021 earnings results, with the CSI 300 Banks Index finishing up more than 1%.