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Foreigners turn sellers of Chinese shares in July on Covid worries

Reuters
05 Aug 2022 00:00:00 | Update: 05 Aug 2022 00:26:41
Foreigners turn sellers of Chinese shares in July on Covid worries

Overseas investors turned net sellers of Chinese stocks in July, as mainland stock prices tumbled on concerns that Covid-19 flare-ups and ensuing lockdowns would further disrupt economic activity.

Refinitiv data showed foreigners sold a net 21.07 billion yuan ($3.12 billion) worth of mainland shares in July via Stock Connect, a key cross-border link between the mainland and Hong Kong exchanges.

They sold a net 11.8 billion yuan worth of shares in the Shanghai stock exchange, and 9.27 billion in the Shenzhen stock exchange.

Foreigners had bought a cumulative 95.45 billion yuan in the previous three months, according to the data.

China’s factory activity contracted unexpectedly in July, due to the fresh emergence of coronavirus cases, with its official manufacturing manager’s index falling to 49 from a reading of 50.2 in June. A reading below 50 is considered as a contraction.

Also, a threat by Chinese home buyers to halt mortgage payments until developers resume construction of pre-sold homes deepened concerns about the debt-stricken property sector last month, raising fears banks could face hefty writedowns.

The benchmark CSI300 Index dropped 7 per cent last month.

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