China Indexes Edged Higher as Lawmakers Debate Fiscal Deficit Measures

Li Chen
04 Nov, 2024
Hong Kong

Stocks in China and Hong Kong advanced as investors shifted their focus to the key meeting of lawmakers that could pave the way for fiscal stimulus.

The Hang Seng index gained 0.3% and the mainland-focus CSI 300 index advanced 1.4% as the weeklong Standing Committee of the People's National Congress started.

The critical meeting of lawmakers is expected to approve the lifting of the debt ceiling limit and the sale of long-term bonds to finance fiscal measures supporting the property markets. 

Investors are anticipating that the previously pledged fiscal measures by the top political leaders and finance ministry over the last five weeks will soon be enacted. 

The legislative meeting this week is likely to provide more clarity about the amount and timing of fiscal measures and details of the plan to revive the moribund property market. 

Market participants have built up expectations of fiscal measures totaling between 2 trillion yen and 4 trillion yen and supportive financial measures for local governments to revive local residential projects in second- and third-tier cities. 

On the economic front, investors are looking forward to the release of international trade data and the survey of non-manufacturing industries. 

 

China Stock Movers 

The Hang Seng index increased 0.3% to 20,574.16, and the CSI 300 index rose 1.4% to 3,944.76. 

Property stocks edged lower and erased some of Friday's gains following the lukewarm new home sales over the weekend. 

China Vanke declined 1.6% to HK $7.29, China Resource Land decreased 0.4% to HK $26.65, and Sun Hung Kai Properties eased 0.1% to HK $85.10. 

Electric vehicle makers traded higher after October vehicle sales were ahead of market expectations. 

Steep discounts and government subsidies supported the sale of electric vehicles, and the advanced vehicle sales surpassed petrol car sales for the third month in a row in October. 

Electric vehicle sales increased to 1.12 million units in October, with a market share of 53.3%, according to CPCA, or China Passenger Car Association. 

BYD increased 3.4% to HK $287.20 after the company's vehicle sales soared 66% from a year ago to 502,757 units. 

The company reported a fifth consecutive monthly record sales of electric and hybrid vehicles, largely because of the subsidies to replace older petrol cars. 

Li Auto increased 1.5% to HK $98.55 after the company said electric vehicle sales dropped 1% from the previous month to 51,443 units. 

NIO decreased 0.3% to HK $5.23 after the company said sales fell 1% from the previous month to 20,976 units.