China stocks close lower as virus worries, Fed rate hike bets weigh

SHANGHAI: China stocks closed lower on Tuesday as expectations of quicker U.S. Federal Reserve interest rate hikes and domestic COVID-19 outbreaks weighed on sentiment, with defence and information technology stocks leading the decline.

The blue-chip CSI300 index fell 1.0% to 4,797.77, while the Shanghai Composite Index lost 0.7% to 3,567.44.

Some of Wall Street's biggest banks now expect the Fed to raise interest rates four times this year https://www.reuters.com/markets/us/wall-street-banks-see-four-us-hikes-2022-inflation-is-wild-card-2022-01-10, and Goldman Sachs sees the U.S. central bank beginning the process of reducing its balance sheet size as soon as July.


Overseas investors sold more than 4 billion yuan of A-shares through the Stock Connect programme on Tuesday, according to data from East Money Information Co.

The defence sector slumped 3.3%, while the information technology sub-index, consumer staples and automobiles retreated between 2% and 2.6%.

China is battling with its latest local COVID-19 outbreaks, and the Omicron variant has been detected in at least three provinces.

Real estate developers gave up gains in the morning session to end 0.1% lower.

Some banks rose on robust 2021 earnings results, with the CSI 300 Banks Index finishing up more than 1%.