China stocks drop to one-week low as Covid-19 outbreak clouds economic revival efforts, even as VIE stance boosts tech start-ups
- Stocks post small declines as China faces its worst Covid-19 outbreak in almost a year, clouding economic recovery outlook
- Clarity on regulations regarding Chinese VIE-type companies in offshore markets seen as aiding tech start-ups
The Shanghai Composite Index slipped 0.1 per cent to 3,615.97 at the close. The ChiNext gauge of start-ups in Shenzhen also fell by that much. Shenzhen Pacific Union Precision Manufacturing gained 7.9 per cent on its debut on Shanghai’s Star Market.
Consumer staple and technology stocks provided the biggest drag on the benchmark, with their sub indexes falling by at least 0.3 per cent, while consumer discretionary and health care names were the best-performing industry groups.
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“The market is facing the challenges of economic slowdown, growing Covid-19 infections and a vacuum in earnings reports,” said Zhu Bin, a strategist at Southwest Securities. “So sideways trading will probably persist until the annual results season next year.”