CHINA STOCKS DOWN

REUTERS - MAY 14, 2020 - Chinese shares closed lower on Thursday as investors worried about a prolonged recovery in the economy, while awaiting more active stimulus policies to cushion the blow from the COVID-19.

The Shanghai Composite index ended 0.96% lower at 2,870.34.

The blue-chip CSI300 index shed 1.08%, with its financial sector sub-index sliding 1.33%, the consumer staples sector falling 1.23%, the real estate index declining 1.67%. Its healthcare sub-index edged down 0.11%.

The smaller Shenzhen index ended down 0.94% and the start-up board ChiNext Composite index was weaker by 1.076%.

China needs more active fiscal policy as pressure on its economy is still increasing, according to an article by Finance Minister Liu Kun published in the official People's Daily on Thursday.

"Chinese policymakers have been assuring the market with more active policies to boost economy but investors are awaiting the implementation to support their confidence," said Zhang Gang, an analyst with Central China Securities.

Chinese investors are also worried about more selloff in Wall Street indexes due to warnings from the U.S. Federal Reserve of an "extended period" of weak economic growth, said Zhang.

Continuous weak demand from Europe and the U.S. can hurt China's economy even though the Asian country is on the path of a full recovery of production, he added.

China reported 3 new COVID-19 cases for May 13, down from 7 cases a day earlier, the country's health commission said.

Around the region, MSCI's Asia ex-Japan stock index was weaker by 1.35%, while Japan's Nikkei index closed down 1.74%.

At 0704 GMT, the yuan was quoted at 7.098 per U.S. dollar, 0.1% weaker than the previous close of 7.091.

The largest percentage losers on the Shanghai index were Sinovel Wind Group Co Ltd, down 10.17%, followed by Sailun Group Co Ltd, which fell 9.73% and Shandong Linglong Tyre Co Ltd — down by 9.14%.

So far this year, the Shanghai stock index is down 5.9% and the CSI300 has fallen 4.2%, while China's H-share index listed in Hong Kong is down 13.4%. Shanghai stocks have risen 0.36% this month.

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