🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

Chinese stocks plummet, yuan slides amid COVID protests

Published 11/27/2022, 09:20 PM
Updated 11/27/2022, 09:24 PM
© Reuters.

By Ambar Warrick 

Investing.com-- Chinese stock markets and the yuan slumped to an over two-week low on Monday as protests against the government’s anti-COVID measures broke out in several major cities, raising the prospect of more economic disruption. 

Chinese civilians clashed with the police in several cities including Beijing and Shanghai over the weekend, as public discontent with the zero-COVID policy hit a peak after a deadly fire in western China last week. This also comes after riots in Zhengzhou over the government’s reimposition of a lockdown in the city. 

China’s blue-chip Shanghai Shenzhen CSI 300 index fell 2.2%, while the Shanghai Composite index fell 1.6%. Selling also spilled over into Hong Kong, with the Hang Seng index tumbling 3.6%. 

The yuan slumped 0.8% to 7.2281 to the dollar, while the offshore yuan fell 0.6% to $7.2415. Both currencies and the Chinese indexes traded at their weakest level in over two weeks. 

The protests mark an extreme reversal in market sentiment towards China after hopes that the country would relax its strict zero-COVID policy spurred some buying into local markets earlier this month.

But China instead tightened its anti-COVID measures in recent weeks, as the country grapples with a record-high rate of daily infections. 

While the rise in infections is still small in comparison to levels seen in other countries, Chinese officials reiterated their commitment to the zero-COVID policy due to low vaccination rates and a lack of healthcare infrastructure. 

The strict zero-COVID measures severely weighed on Chinese economic growth this year, as the country shut down several industrial hubs to curb rising infections. While the government rolled out a slew of stimulus measures to help support growth, they have so far had a limited effect on the economy. 

Data over the weekend showed China’s industrial profits dropped further in October, while PMI data due later this week is expected to show continued weakness in business activity.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.