China Indexes Extended Downward Trend Ahead of Inflation Data

Li Chen
11 Jun, 2024
Hong Kong

Market indexes in Shanghai and Hong Kong traded lower as investors set aside rate-cut expectations in the U.S. and China. 

The CSI 300 and the Hang Seng indexes declined and trimmed this year's gains after property market worries and an uneven economic rebound overwhelmed market sentiment. 

The Hang Seng index has dropped 8% from its high in May after China's weak import growth suggested weak domestic demand, and the weakness in manufacturing sector growth also contributed to market nervousness. 

China is set to announce its inflation data on Wednesday, and economists are anticipating a slight pick-up in inflation, and consumer price inflation in May is likely to accelerate to an annual pace of 0.4% from the 0.3% pace in April. 

The U.S. is also set to announce its inflation update on Wednesday, followed by the Federal Reserve releasing its monetary policy decisions and economic projections. 

The Federal Reserve is expected to hold steady its interest rate range between 5.25% and 5.50% and provide insights into the possible rate cut later in the year. 

Investors have lowered their rate-cut expectations to one from as high as four earlier in the year. 

 

China Stock Movers 

The CSI 300 index declined 1.1% to 3,533.97, and the Hang Seng index dropped 1.7% to 18,056.13. 

Li Auto declined 4% to HK$74.90, BYD increased 2% to $229.20, and Nio decreased 3.4% to $36.95. 

The Bank of China declined 2.7% to HK$3.71, and the and the Industrial and Commercial Bank of China decreased 1.5% to HK$4.35.

Gold mining and jewelry retailers traded down after the People's Bank of China halted its 18-month-long steady purchase of gold. 

Zijin Mining Group declined 4.5% to HK$16.66, and Chow Tai Fook Jewellery Group fell 3.5% to HK$9.41.