Chinese stocks close down as COVID concerns outweigh support pledges

Chinese stocks closed down on Tuesday, despite the authorities vowing to support the economy amid a COVID-19 outbreak, with investors watching whether tough pandemic controls might be relaxed. The blue-chip CSI300 index fell 0.8% to 4,134.90, while the Shanghai Composite Index lost 0.1% to 3,194.03 points.

Chinese stocks closed down on Tuesday, despite the authorities vowing to support the economy amid a COVID-19 outbreak, with investors watching whether tough pandemic controls might be relaxed.

The blue-chip CSI300 index fell 0.8% to 4,134.90, while the Shanghai Composite Index lost 0.1% to 3,194.03 points. The Hang Seng index fell 2.3%, to 21,027.76, while the China Enterprises Index lost 3.0%, to 7,167.67 points.

** China will step up financial support for industries, companies and people affected by COVID-19 outbreaks, the central bank (PBOC) said on Monday. ** This came after data showed China's economy slowed in March as consumption, real estate and exports were hit hard, taking the shine off faster-than-expected first-quarter growth numbers.

** "But the real growth bottlenecks remain," Nomura said in a note. "Adjustments to China's zero-COVID strategy are key to a growth recovery in coming months." ** By mid-April, the PBOC had paid 600 billion yuan ($94.31 billion) in profits to the central government - equivalent to a 25-basis points cut in banks' reserve requirement ratios (RRR), the central bank said.

** This move followed a 25 basis points (bps) cut in the reserve requirement for all banks, announced by the central bank on Friday, releasing about 530 billion yuan ($83.25 billion) in long-term liquidity, while analysts said room for further interest rate cuts may be limited. ** Healthcare firms and semiconductor stocks slipped 2.2% and 2.7%, respectively, while energy stocks gained 2.6% and infrastructure companies added 1.2%.

** China's state planner called on Tuesday for the implementation of policies to support the country's catering and retail sectors, as well as spending on new energy vehicles. ** Consumer staples edged down 0.2%, while new energy vehicle stocks ended lower 0.5%.

** Hong Kong-listed tech giants closed down 3.8%, leading declines on the Hang Seng index, as trading resumed after a holiday. ** Video and livestreaming platform Bilibili Inc slumped more than 10%, after China banned livestreaming of unauthorised video games on Friday.

** Food delivery giant Meituan plunged nearly 6%, after Shanghai's market regulator said on Monday it had summoned 12 e-commerce platforms including Meituan and eleme.me over topics including price gouging during the pandemic. ** China Merchants Bank fell 11.5% in Hong Kong and 3% in Shanghai, after the bank said on Monday its board of directors had agreed on the removal of Tian Huiyu as its president and director.

** The bank's operations and performance will not be greatly changed, given its good management structure and high standard of corporate governance, Guotai Junan Securities said.