(Bloomberg) — Hong Kong-listed Chinese shares tumbled late in the day, as investors judged the road to reopening to be difficult and the outlook for an economic recovery uncertain.
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The Hang Seng China Enterprises Index closed 3.3 percent lower in its worst day in more than a month, as technology and property shares tumbled. The post-lunch break rally, fueled by China’s 10 new measures to tackle Covid-19, which included lifting testing rules in most public places across the country, quickly evaporated.
With doubts remaining over the path to the reopening of Asia’s largest economy, market participants were quick to book gains after sporadic rallies. There are also concerns about a possible spike in infections and further disruption to the economy next year, although senior officials are said to be discussing a growth target of around 5%.
“Although the market is still trading on positive expectations, we are not completely out of the woods as we still have to overcome the panic that may come with the first wave of infections,” said Ma Xuzhen, fund manager at Longquan Investment Management .
Country Garden Holdings Co. tumbled 15%, the biggest decliner on the Hang Seng China, after raising $619 million through a share offering, its second offering in a month. A gauge of Hong Kong-listed technology shares fell the most since Nov. 3.
Macau’s index of gaming shares ended 1.9% lower after jumping as much as 9.5% as authorities said they would follow the mainland in easing Covid restrictions.
Sentiment was weighed down by weak trade data, with China’s exports and imports contracting at a sharper pace in November. The Hang Seng index fell 3.2 percent, while the mainland’s CSI 300 closed 0.3 percent lower.
“Uncertainty remains high,” particularly about how disruptive the exit from Covid Zero could be and whether policymakers are willing to stimulate the economy, economists at Macquarie International Services Ltd., including Larry Hu, wrote in a note.
–With the help of April Ma.
(Adds tech sale details in fifth paragraph, updates prices throughout)
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