China stocks fall on profit-taking following new COVID easing measures

China's stocks fell on Wednesday as some investors booked profits after the government announced sweeping changes

to ease a tough anti-COVID policy that has battered the economy. Sentiment was also dented by dismal

trade data that showed China's exports and imports contracted more sharply than expected in November amid flagging demand at home and abroad.

The blue-chip CSI 300 Index was down 0.5% at 0610 GMT, after surging as much as 0.8% following the COVID easing measures, which had been widely expected. The Shanghai Composite Index lost 0.7%. Meanwhile, Hong Kong's Hang Seng Index retreated 1%, and the Hang Seng China Enterprises Index lost 0.8%.

China said on Wednesday it would allow COVID patients with mild symptoms to isolate at home, and drop a requirement for people to show negative tests when they travel between regions, among other measures

. While some of the changes echoed similar moves made by other countries many months ago, the announcement was the strongest sign so far that China is preparing its people to live with the disease, though analysts say the path to fully reopening the economy will be long and bumpy, and not without risk if new infections or deaths surge.

"Further loosening of COVID curbs is well expected, as there is no turning back of an arrow once it's shot, and we sell when the mood is high," said Wang Xin, portfolio manager at Tosan Fund Management Co. Wang said his fund has been slashing stock exposure over the past few days as the market has largely priced in further easing in restrictions, and he warned of underestimating risks ahead.

Tourism-related stocks jumped as much as 4.2% at one point and were last up 1.5%, while transport firms and healthcare firms added more than 0.5% each. Underscoring the challenges to its economic recovery, data earlier on Wednesday showed China's exports in November contracted 8.7% from a year earlier, while imports tumbled 10.6%, both missing expectations by large margins, due to a weakening global demand and COVID outbreaks at home.

China should optimise epidemic prevention and control measures next year as it seeks to better coordinate policies with economic and social development, state media reported on Wednesday, after a meeting of the Communist Party's politburo. The meeting also said China will focus on stabilising growth, employment and prices while preventing and defusing major systemic risks.

"The Politburo meeting sent positive messages for economic policies next year," said Zhiwei Zhang, chief economist at Pinpoint Asset Management. "I'd expect policies to become more market friendly in 2023." Investors are now focusing on the upcoming Central Economic Working Conference this month, where Zhang expected more proactive policies to be announced than last year's.

Real estate developers dropped more than 2%, and energy shares fell more than 2%. Chinese property developer Country Garden Holdings Co Ltd said it plans to raise HK$4.7 billion ($603.9 million) via a share placement in Hong Kong, sending the company's shares down more than 10%.

Hong Kong-listed mainland property developers also declined 4.5%. Macau casino operators jumped 3%, after soaring as much as 9.5% on the day on hopes China's easing moves would encourage more mainland gamblers to travel to the territory.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)