China stocks turn range bound, Hong Kong dips, as U.S. data dulls hopes for slower Fed hikes
Trading halted for 3 minutes on Tuesday morning on Chinese markets, as the nation paid respects to late former leader Jiang Zeming. Hong Kong stocks declined after hitting the highest level since Sept.
China stocks traded in a narrow range while Hong Kong stocks lost steam on Wednesday, as strong U.S. services data raised doubts whether the Federal Reserve would opt to reduce the size of its interest rate hikes so soon.
Those concerns over the Fed's intentions counter-balanced some of the optimism arising from hopes that China would soon dial back its strict sero-COVID strategy. China's blue-chip CSI 300 Index gained 0.55%, while the Shanghai Composite Index edged down 0.08%. Trading halted for 3 minutes on Tuesday morning on Chinese markets, as the nation paid respects to late former leader Jiang Zeming.
Hong Kong stocks declined after hitting the highest level since Sept. 1 on Tuesday - Hang Seng Index fell 0.93%, Hang Seng China Enterprises Index down 1.36%. China is set to announce a further easing of some of the world's toughest COVID curbs as early as Wednesday, sources told Reuters.
More Chinese cities have relaxed some quarantine and virus testing rules. Beijing city on Tuesday said no longer requires COVID test results to enter supermarkets, buildings. China may eventually downgrade its management of COVID-19 as a top-level Category A infectious disease to a less strict Category B disease as early as January.
Yet at least in short term, rising COVID cases and containment measures are dampening demand and production. China's services activity shrank to six-month lows in November. “We expect industrial production growth to drop further to 3.5% year on year in November (vs. 5.0% in October), due to slower exports and disruptions from the recent widespread COVID outbreaks,” BofA Securities said in a note.
Sector wise, food and beverages and semiconductors jumped 3.4% and 2.6% respectively, leading the gains, while real estate dropped 1.9%. In Hong Kong, tech firms retreated 1.9% with Alibaba down 3%.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)