China, Yuan shares fall as Beijing steps up “Covid zero” policy

Investors in front of an electronic board showing information about the stock market, in Shanghai, China

SHANGHAI (Reuters) – Chinese and Hong Kong stocks tumbled on Friday as the yuan slipped to a year-and-a-half low as Beijing’s pledge to step up its Covid zero policy hit investor confidence and fueled concerns of a further economic slowdown

Sentiment was also affected by a global sell-off in equities amid rising inflation, as well as rising geopolitical tensions.

The CSI300 index, which brings together the largest companies listed in Shanghai and Shenzhen, fell 2.53% on the day, while the Shanghai index was down 2.16%. The Hong Kong Hang Seng Index fell 3.81%.

The yuan weakened sharply against the dollar, reaching the lowest level since November 2020.

China will fight any comments and actions that distort, cast doubt on or deny the country’s response to Covid-19, state television reported on Thursday after a meeting of the Communist Party’s Politburo Standing Committee, the highest ranking official. China’s decision-making body.

“The economy was barely mentioned at the meeting, suggesting that Beijing may have become more determined to stick to the Covid zero strategy,” Nomura said in a note.

Under the controversial “Covid zero” policy, China has shut down major cities including Shanghai, hitting production, disrupting supply chains and fueling recession fears.

. In TOKYO, the Nikkei index rose 0.69% to 27,003 points.

. In HONG KONG, the HANG SENG index fell 3.81% to 20,001 points.

. In SHANGHAI, the SSEC index lost 2.16% to 3,001 points.

. The CSI300 index, which brings together the largest companies listed in SHANGHAI and SHENZHEN, dropped 2.53% to 3,908 points.

. In SEOUL, the KOSPI index fell by 1.23% to 2,644 points.

. In TAIWAN, the TAIEX index registered a drop of 1.72%, to 16,408 points.

. In SINGAPORE, the STRAITS TIMES index fell by 1.55% to 3,291 points.

. In SYDNEY, the S&P/ASX 200 index fell 2.16%, to 7,205 points.

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