China Indexes Recover Morning Losses Ahead of Third Plenum Policy Announcements

Li Chen
18 Jul, 2024
Hong Kong

Stocks in Shanghai and Hong Kong traded volatile and rebounded from heavy losses in morning trading to close higher. 

The Hang Seng index and the CSI 300 index dropped at the open after semiconductor and tech stocks plunged following a report that the U.S. administration is looking to impose severe penalties on companies that share advanced semiconductor technology with China. 

However, market sentiment recovered in late afternoon, and benchmark indexes erased a loss of 2% in Hong Kong to close higher. 

Investors looked forward to possible market-supporting measures and economic reform announcements at the end of the Third Plenum later today. 

The 4-day close-door meeting of 205 members and 171 alternative members of Chinese Central Committee policymakers is a forum to discuss and set the nation's economic agenda for the next five years. 

Investors have lowered their expectations of deep economic reforms as the world's second-largest economy faces weakening domestic demand, rising geopolitical challenges, and steady capital outflow. 

 

China Stock Movers 

The Hang Seng index increased 0.5% to 17,830.35, and the CSI 300 index advanced 0.4% to 3,514.43. 

Semiconductor stocks were under pressure after Bloomberg News reported that the U.S. administration is preparing to place severe curbs on companies sharing manufacturing technology with China. 

Hua Hong Semiconductor increased 2.5% to HK $22.65, BYD Electronic fell 1.0% to HK $34.65, and SMIC increased 3.3% to HK $17.68. 

Nongfu Spring Company soared 7.4% to HK$35.65 after the Hong Kong Consumer Council reversed its earlier decision to label bottled water from the company as containing bromate. 

The HKCC apologized, said the brand was incorrectly categorized, and placed the company's product as a five-star product.