Pandemic and earnings results fuel stock sell-off

The Chinese stock market slipped on Friday, as investors chose to be cautious on the last trading day of the month.

The benchmark Shanghai Composite Index slumped 1.47 percent to close at 3,224.53, wiping out the week's previous gains.

The smaller Shenzhen Component Index plunged 2.09 percent to finish at 13,236.60, while the ChiNext Index dropped 1.63 percent to end its trading day at 2,655.86.

Combined turnover on the two bourses was 870.8 billion yuan (US$130 billion), compared with 780.2 billion yuan in the previous session.

The losses were broad-based with textile and clothing firms, food and beverage makers and media companies leading the decline.

Market sentiment will likely remain cautious due to the worsening COVID-19 crisis in the United States and across Europe, in addition to tepid third-quarter earnings results from many listed companies, analysts said.

Concluding today,  the 19th Communist Party of China Central Committee outlined 2035 development vision and guidelines for the 14th Five-Year Plan (FYP).

By 2035, China is set to “basically achieve modernization," including lifting its GDP per capita to that of a moderately developed country, making significant technological breakthroughs and reducing carbon emissions.

On the supply side, the 14th FYP is likely to focus on the modernization of industrial and supply chains and self-reliance in technological development, according to a report from HSBC's global research team.

“In our view, this means there will be more of a policy push for higher R&D spending in the coming years, especially in strategically emerging sectors such as biotechnology, semiconductors and new-energy vehicles," the report noted.