China's Fiscal Stimulus Lacks Details, Stocks Turn Lower In Hong Kong

Li Chen
14 Oct, 2024
Hong Kong

Market sentiment in China trading was weak after the finance minister failed to provide clarity on the possible fiscal stimulus measures. 

The Hang Seng index dropped as much as 1.5% and the CSI 300 index edged higher after investors reacted to comments from the finance minister at a press conference held on Saturday. 

At the widely anticipated press conference held by Finance Minister Lan Foan, he reiterated the central government commitment to provide additional liquidity to the local banks and provide direct financial assistance to families. 

Minister Foan laid out the government's plan in broad terms to bolster the local government's finances and support the purchase of residential units, helping the property development companies. 

The move was widely anticipated, but the plan failed to provide a specific timetable and the size of the stimulus. 

Investors were disappointed by the lack of clarity and urgency on the part of policymakers, which could lead to sharp swings in stock trading in the weeks ahead. 

Moreover, the latest inflation updates indicated continuation of China's deflationary trend in September. 

Consumer price inflation in September slowed to an annual increase of 0.4% from 0.6% in August, the lowest reading in three months, according to the data released by the National Bureau of Statistics. 

Consumer price inflation was positive for the eighth consecutive month, but the increase was the smallest in three months because of the weakness in housing prices and transportation costs. 

Core consumer inflation, which excludes food and energy prices, increased 0.1% from a year ago. 

Producer price inflation, which tracks wholesale prices, declined 2.8% in September, faster than the 1.8% decline in the previous month, the statistics bureau reported in a separate report over the weekend. 

Producer prices contracted for the 24th month in a row and fell at the fastest pace since March. 

 

China Stock Movers 

The Hang Seng index increased 0.2% to 21,284.91 and the CSI 300 index advanced 2% to 3,965.41. 

Alibaba Group declined 0.5% to HK $105.30, JD.com rose 1.6% to HK $169.80, and Tencent.com Holdings dropped 0.8% to HK $435.40. 

Longfor Group rose 2.7% to HK $13.74, China Vanke added 1.4% to HK $7.41, and China Resources Land jumped 7.4% to HK $27.60. 

China International Capital Corp. dropped 5.2% to HK $13.90 after China's securities regulator confirmed that the company is investigated for its lack of due diligence while listing a local chip company in 2021.