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China stocks fall as COVID cases, weak data dent growth outlook

SHANGHAI, March 14 (Reuters) – China stocks fell on Monday as domestic COVID-19 cases jumped to a two-year high, prompting Beijing’s technology and financial hubs to impose restrictions, while a sharp drop in February’s new bank loans also clouded the outlook for economic growth.

* The CSI300 index (.CSI300) fell 1.7% to 4,232.20 points at the end of the morning session, while the Shanghai Composite Index (.SSEC) lost 1.3% to 3,266.73 points.

* The Hang Seng index (.HSI) dropped 3.8% to 19,771.47 points. The Hong Kong China Enterprises Index (.HSCE) lost 5.3% to 6,686.68.

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** New bank lending in China fell more than expected in February while broad credit growth slowed, raising pressure on the central bank to ease policy further to support the slowing economy. read more

** China in recent days reported the highest daily figure in two years, potentially complicating Beijing’s “dynamic-clearance” ambition to suppress contagion as quickly as possible. read more

** China’s southern technology hub of Shenzhen suspended public transport including buses and subways from Monday, and the financial hub of Shanghai locked down some housing and office compounds.

** “I think the outbreaks impose downside risk to China’s economy at least in the next few months,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.

** Shares of COVID-19 antigen kit makers surged after China granted approval for five COVID-19 antigen kits made by local companies to be used for self-testing, as Beijing tweaks its testing regime that has been pressured by Omicron.

** Consumer staples (.CSICS) and transport firms (.CSI000957) dropped 3.1% each, while tourism stocks (.CSI930633) lost 4.3%.

** Hong Kong’s benchmark Hang Seng Index (.HSI) fell to lowest level since June 2016.

** Hong Kong-listed tech giants (.HSTECH) tumbled 7.6% to a record low, extending a slump from the previous session on worries of their shares being delisted in the United States. read more

** Adding fresh regulatory concerns, China’s cyberspace regulator issued a new set of draft measures on Monday aimed at protecting minors, demanding online gaming, livestreaming, audio and video platforms to set up a “youth mode” for minors. read more

** Mainland developers listed in Hong Kong (.HSMPI) plunged nearly 9% to the lowest since Feb 2017.

** Household loans, mostly mortgages, suffered a rare contraction of 336.9 billion yuan in February, compared with 843 billion yuan in the prior month, pointing to continued weakness in China’s property market, a major economic growth driver. read more

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Reporting by Shanghai Newsroom; Editing by Sherry Jacob-Phillips

Our Standards: The Thomson Reuters Trust Principles.