Chinese consumer, casino stocks fall as COVID-19 cases climb
Chinese consumer stocks sold off Monday as investors’ attention turned to Covid-19 once again as the country’s infections rise and virus-related deaths were reported for the first time in almost six months.
Restaurant, retailer and Macau casino stocks listed in Hong Kong were among the top decliners among blue chips by midday trade, while liquor makers dragged on the Chinese onshore market. Hot-pot restaurant operator Haidilao International Holding Ltd.
slid 6.9% and Chow Tai Fook Jewellery Group Ltd.
lost 6.0%, while Sands China Ltd.
and Galaxy Entertainment Group Ltd.
fell 6.7% and 6.0%, respectively. The city’s benchmark Hang Seng Index
was down 2.1% at 17616.06.
China’s National Health Commission on Monday reported more than 26,000 daily cases of Covid-19, the highest count in seven months and the sixth straight day that daily cases have surpassed 20,000. Two virus-related deaths were recorded in Beijing.
In the southern manufacturing hub of Guangdong, the hardest-hit province in the latest outbreak, authorities reported more than 9,000 cases and have ordered a lockdown of the Baiyun district for five days.
Chinese consumer stocks had rebounded from low levels in late October after Beijing unveiled a package of measures aimed at reducing the impact of its stringent zero-COVID policy. While some local officials have moved to ease restrictions, such as doing away with mandatory mass testing, others faced pressure to stem rising cases by imposing movement curbs.
“Covid numbers [in China] are rising rapidly, forcing targeted lockdowns, which will continue to adversely affect economic activity,” TS Lombard economist Lawrence Brainard said in a note.
Local officials “still believe their performance is determined by avoiding massive infections,” Nomura economists led by Ting Lu said in a note. “There is a high risk that fine-tuning efforts will be offset by local officials implementing further tightening measures.”
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