Protesters gathered in Beijing on Sunday. REUTERS/Thomas Peter
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THOMAS PETER/REUTERS
Shares in mainland China and Hong Kong slid on Monday morning, after protests against the country’s zero-tolerance approach to Covid-19 gathered steam.
Hong Kong’s benchmark Hang Seng Index, which is dominated by Chinese stocks, was down more than 4% after the market opened. It recovered some ground in the morning but was still around 2% lower by midmorning. The Chinese domestic CSI 300 index was down 1.6%.
Widespread demonstrations, which are rare in mainland China, were held in several large cities including Beijing, Shanghai and Wuhan during the weekend. The protests followed a deadly fire in Urumqi, the capital of the remote region of Xinjiang, on Friday that officials said killed 10 people. Some residents suggested that pandemic restrictions contributed to a delay in putting out the fire.
China reported nearly 40,000 new locally transmitted cases on Sunday, according to the National Health Commission.
Hao Hong, chief economist at Grow Investment Group, said some investors see the protests as a good excuse to take profits after gains of more than 17% in the Hang Seng so far in November.
“The protests are mostly about people’s livelihood and Covid restrictions, not political in nature. But what’s rare about these protests is that they span multiple cities. Many people in China haven’t seen this situation before and thus don’t know how to trade it,” said Mr. Hong.
The offshore yuan fell against the U.S. dollar in the morning but is recovering. The currency was trading at about 7.21 against the U.S. dollar at 11 a.m. local time, after weakening to 7.25 earlier in the day.
Write to Rebecca Feng at rebecca.feng@wsj.com
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