Dow Jones Newswires: Chinese consumer-related stocks rally as COVID restrictions eased


Chinese consumer-related shares from airlines to food chain operators are higher in early trade Monday, after Beijing pared back some of its strictest COVID-19 control measures, pointing to a reopening of the economy.

Shares of the three major Chinese airlines rose, with Air China Ltd.

jumping 3.4%, China Eastern Airlines Corp.

adding as much as 4.2% and China Southern Airlines Co.

rising 2.7%. Index heavyweight Kweichow Moutai Co.

was 2.3% higher and China Tourism Group Duty Free Corp.

gained 5.2%.

The Shanghai Composite Index

reclaimed the 3200 level for the first time in over two months, as officials in major cities, including Beijing, Guangzhou, and Hangzhou, ended mandatory COVID testing for people who want to use public transport, lifted several curbs on residents’ movements and allowed home quarantine for certain COVID patients.

However, Morgan Stanley economists led by Robin Xing said that given the limited hospital resources and very low vaccination rate among the elderly, they “expect lingering containment measures, and possibly some zigzagging, during the initial phase of reopening.” They expect a full reopening only by spring 2023.

“The bottom line is that the authorities don’t appear to be backtracking despite the rise in COVID cases,” Jefferies said in a note to clients.

But, “economic data is unlikely to improve for some time,” Jefferies said, pointing out that Chinese manufacturing and service purchasing managers’ indexes in November both missed estimates and contracted further on month.

Jefferies favors Chinese consumer stocks over the rest of the Hong Kong equity market.

Chinese consumer shares listed in Hong Kong also rose in morning trade. Restaurant operator Haidilao

jumped 13%, sportswear manufacturer Li Ning Co.

was up 4.1% and Anta Sports Products Ltd.

advanced 6.3%.

Dow Jones Newswires: China Caixin services PMI falls to 6-month low amid stifling COVID restrictions

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