China Indexes Extend Losses Amid Fog of Fiscal Measures

Li Chen
15 Oct, 2024
Hong Kong

Benchmark indexes in Hong Kong and mainland China traded down for the second week in a row amid rising uncertainty about the possible fiscal stimulus measures. 

The Hang Seng index decreased as much as 3% and the CSI 300 index dropped 1.5% as investors worried that China's fiscal stimulus measures may fall short of expectations. 

Chinese politicians and policymakers In a familiar pattern of talking up their commitment to bolster economic growth, followed by piecemeal and symbolic gestures to revive economic growth have dented consumer confidence. 

Moreover, finance minister Lan Fo'an hinted at a widely publicized press conference that the country has room to increase its already high debt to finance new fiscal measures. 

Any effort to increase the overall national debt will require approval from China's National People's Congress, a rubber stamp parliament with 2,977 representatives. 

Market sentiment was also weak after China's exports rose at a slower pace of 2.4% and imports advanced 0.6%, indicating weak domestic demand and growing difficulties of increasing shipment amid higher international trade barriers. 

 

China Stock Movers 

The Hang Seng index declined 2.6% to 20,542.95 and the CSI 300 index dropped 1.3% to 3,908.63. 

Property stocks declined for the third session in a row on the lack of clarity of the possible fiscal measures. 

China Vanke dropped 2.4% to HK $7.01, Longfor Group declined 2.7% to HK $13.14, and China Resources Land fell 1% to HK $26.95. 

Banks were also in focus after the latest new loan data fell short of market expectations. 

Bank of China decreased 0.5% to HK $3.82, China Construction Bank dropped 0.6% to HK $6.11, and Industrial and Commercial Bank of China eased 1.4% to HK $4.77.

Technology stocks were under pressure ahead of the upcoming earnings season, and leading tech companies extended losses to 20% from the peak on October 4. 

Alibaba Group decreased 4% to HK $100.90, Tencent Holdings dropped 3.3% to HK $421.20, and Meituan Holding fell 5.8% to HK $172.90.