The Hang Seng China Enterprises Index closed 3.3% lower in its worst day in more than a month, as tech and property shares slumped. A post-lunch break rally fueled by China's 10 new measures for dealing with Covid - 19, which included a scrapping of testing rules in most public venues nationwide, quickly evaporated.
With doubts surrounding the reopening of Asia's largest economy, market participants have been quick to book profits after sporadic rallies. There are also concerns about a possible surge in infections and further disruption to the economy next year, even as senior officials are said to be debating a growth target of around 5%.
Ma Xuzhen, a fund manager at Longquan Investment Management, said the market is still trading on positive expectations, but we still have to get past the panic that might come with the first wave of infections.
Country Garden Holdings Co. dropped 15% on the Hang Seng China gauge after raising $619 million via a share placement, its second offering in a month. The Hong Kong-listed tech shares declined the most since Nov. 3.
An index of Macau gaming stocks ended 1.9% lower, after jumping as much as 9.5%, as authorities said they ll follow the mainland in easing Covid curbs.
The sentiment was worsened by weak trade data with China's exports and imports contracting at a steeper pace in November. The Hang Seng Index fell by 3.2%, while the mainland CSI 300 closed 0.3% lower.
The uncertainty remains high, particularly regarding how disruptive the exit from Covid Zero could be and whether policymakers are willing to leverage up the economy, Macquarie International Services Ltd. economists including Larry Hu wrote in a note.
None of JPMorgan is trying to fix health care.