- Hang Seng China Enterprises Index pares earlier gain
- Stocks rose earlier as authorities sought to boost confidence
According to Bloomberg’s article published on October 26, 2022, Chinese stocks in Hong Kong pared gains as the city of Wuhan locked down one of its central districts after Covid cases were found.
The Hang Seng China Enterprises Index trimmed its gain to 0.4% as of 2:49 p.m. in Hong Kong. It rallied 2.6% earlier as authorities sought to bolster investor confidence in one of the world’s worst-performing markets this year. China’s benchmark CSI 300 Index pared most of its early 2% gain.
Photos posted on Chinese social media appeared to show barriers erected in the Hanyang district, where some 900,000 residents were told to stay in their homes from Wednesday. Separately, Macau found one Covid case and listed the patient’s building as restricted area, according to a government statement. Casino shares erased much of their earlier gains.
China’s relentless pursuit of its Covid Zero policy almost three years since the pathogen first emerged in the city of Wuhan has been a sore point for investors. Lockdowns are likely to further sour sentiment in the market after this month’s party congress left investors disappointed due to a lack of supportive policies and the absence of a concrete plan to spur the economy.
The Hang Seng China gauge plunged more than 7% on Monday, the most since 2008, as investors fretted over the potential fallout from President Xi Jinping’s tightening grip on power.
That left international money managers are “frustrated and angry,” according to Bank of America, as Xi seeks to exert greater state control over markets and the economy. The MSCI China Index is on track to underperform a gauge of global stocks by the most since 1999 this month.
