China stocks fall as COVID flare-ups, Fed tightening woes weigh

China stocks slipped on Friday as domestic COVID-19 cases rose sharply, while uncertainty over the Federal Reserve's monetary tightening trajectory also dented sentiment in regional markets. The CSI300 index and the Shanghai Composite Index both fell 0.2% at the end of the morning session. The Hang Seng index added 0.3%, while the Hong Kong China Enterprises Index gained 0.5%.

China stocks slipped on Friday as domestic COVID-19 cases rose sharply, while uncertainty over the Federal Reserve's monetary tightening trajectory also dented sentiment in regional markets. The CSI300 index and the Shanghai Composite Index both fell 0.2% at the end of the morning session.

The Hang Seng index added 0.3%, while the Hong Kong China Enterprises Index gained 0.5%. ** For the week, the CSI300 index is up 0.7% so far and is set to snap a five-week losing streak. The Hang Seng index slipped 0.3%.

** Daily caseload for COVID-19 has risen to more than 2,000 in recent two days from around 1,000 earlier. ** "COVID-19 resurgence still weighs on market confidence in macro recovery despite continuous containment policy re-calibration," said Morgan Stanley analysts in a note.

** "The ongoing housing market uncertainty may also potentially delay the macro economy's bottoming out," they added. ** Other Asian stocks also fell on uncertainty over how aggressively the Fed would raise interest rates.

** Defence stocks retreated 2.2% on Friday, while still up nearly 3% for the week amid geopolitical tensions. ** Energy shares rose more than 2%, and real estate developers added 0.5%.

** Most other sectors remained tepid. Consumer staples , information technology, new energy were down between 0.1% and 1.2% each. ** Mainland property developers traded in Hong Kong lost 1.4% amid debt woes, with Longfor Group down 3.4%. The Chinese developer rose in the previous session after it denied rumours that it had missed payment on commercial paper.

** Hong Kong-listed tech companies edged up 0.5%, with index heavyweights Alibaba and Meituan up more than 1% each. ** China's sportswear group Li Ning Co surged nearly 6% to become the biggest percentage gainer in the Hang Seng Index, as its net profit and revenue for six months jumped.