The mixed finish of the Mainland market came as risk sentiments weighed by the country's most severe COVID-19 wave since the Wuhan outbreak. Mainland China reported 1,415 new confirmed coronavirus cases and 19,199 new asymptomatic cases on April 5. On Tuesday, Chinese authorities extended a COVID-19 lockdown in Shanghai to cover all of the financial centre's 26 million people, despite growing anger over quarantine rules. Some 23 Chinese cities are under total or partial lockdown, affecting an estimated 193 million people in areas accounting for 22% of China gross domestic product.
Also weighing sentiments was survey showed March services activity contracted at the steepest pace in two years. The Caixin Services Purchasing Managers' Index (PMI), which focuses more on small firms in coastal regions, dived to 42 in March from 50.2 in the prior month, as a surge of coronavirus infections restricted mobility and weighed on client demand.
At close of trade, the benchmark Shanghai Composite Index rose 0.02%, or 0.71 point, to 3,283.43. The Shenzhen Composite Index, which tracks stocks on China's second exchange, edged up 0.01%, or 0.14 point, to 2,127.96. The blue-chip CSI300 index sank 0.29%, or 12.32 points, to 4,263.84.
Activity in Chinese manufacturing and services simultaneously contracted in March for the first time since the height of the country's COVID-19 outbreak in 2020. The NBS Manufacturing PMI fell to 49.5 in March from 50.2 in the previous month. The NBS Non-Manufacturing PMI suffered a sharper drop to 48.4 in March, from the previous reading of 51.6.
The world's second-largest economy is now at the risk of slowing sharply as authorities restrict production and mobility in many cities, including Shanghai and Shenzhen, to stamp out fresh COVID-19 outbreaks.
Tourism and transport stocks fell as the number of journeys taken over China's Tomb Sweeping Festival holiday tumbled by nearly two-thirds from last year.
Shares of real estate developers, banks, and infrastructure shares rose on expectations of more stimulus to support the economy.
Shares of digital currency-related firms rose after China's central bank said it would expand a pilot scheme of its digital currency, e-CNY, to more areas and promote its research and development.
ECONOMIC NEWS: China Business Activity Falls At Quickest Pace Since February 2020- China's seasonally adjusted Composite Output Index fell from 50.1 in February to 43.9 in March, to signal a renewed and steep decline in total Chinese business activity. This signalled the first fall in output since last August, with the rate of reduction the quickest seen since the initial onset of the pandemic in February 2020. The reading reflected renewed falls in both manufacturing and services activity, with the latter noting the faster rate of decline. Total new business likewise fell at the fastest rate for just over two years, with both goods producers and services companies noting marked falls in sales. Composite new export work also fell sharply, and at the fastest rate for 22 months. Business confidence subsequently softened in March, to reach its lowest since May 2020.
Meanwhile, the seasonally adjusted headline Business Activity Index fell from 50.2 in February to 42.0 at the end of the first quarter, to signal a renewed contraction of services activity. Furthermore, the rate of reduction was the steepest seen since the initial onset of the pandemic in February 2020 and sharp. Businesses frequently mentioned that tighter virus containment measures had disrupted operations and weighed on client demand in March.
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