China stocks dip on industrial profit data, COVID; HK follows Asian markets higher

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SHANGHAI — China stocks edged lower on Thursday, as bleak industrial profit figure and widening COVID-19 outbreaks weighed on sentiment, while Hong Kong shares followed Asian markets higher amid hopes global central banks will slow monetary tightening.

** Both the CSI300 index and the Shanghai Composite Index fell 0.1% by the lunch break, to 3,652.38, and 2,997.42 points, respectively.

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** The Hang Seng index added 1.7%, to 15,584.56 points, extending a rebound following Monday’s tumble.

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** Profits at China’s industrial firms fell at a faster clip in the January-September period as COVID-19 curbs and a property crisis continued to weigh heavily on factory activity.

** Further damping risk appetite, Chinese cities from Wuhan in central China to Xining in the northwest are doubling down on COVID-19 curbs in a scramble to halt widening outbreaks.

** “Elevated operating cost and rising geopolitical risks continued to weigh on the industrial sector,” Goldman Sachs said in a note to clients, adding profit divergence across sector remained significant.

** China’s consumer, industrial stocks fell on gloomy growth outlooks, while defense-related shares corrected after surges recently triggered by expectations of rising geo-political tensions.

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** An index tracking Chinese traditional medicine stocks rose to a three-month high.

** In Hong Kong, most sectors rose, though listed Chinese developers continued to fall amid prolong property market woes.

** The Hang Seng Tech Index is on track to rebound for a third straight day, almost recovering Monday’s 10% loss.

** Alibaba jumped 5.5%, while JD.com surged 8.8%.

** Monday’s panic selling in Hong Kong was triggered by the perception that Chinese President Xi Jinping will sacrifice growth for ideology, and stick to zero-COVID, after consolidating power at the Communist Party Congress that closed over the weekend. (Reporting by Shanghai Newsroom)