China and Hong Kong Indexes Drop 2% After Key Policy Meeting Reaffirms Previous Commitments

Li Chen
13 Dec, 2024
Hong Kong

Stock market indexes in China and Hong Kong plunged after the key policy meeting failed to provide additional clarity about fiscal stimulus measures. 

The Hang Seng index and CSI 300 index dropped nearly 2% after the policymakers released another vague commitment to sustain economic growth, lacking concrete details and execution plans. 

At the end of a two-day economic work conference, policymakers reiterated the need to increase government spending, issue more long-term bonds, and provide ample liquidity to bond markets. 

However, those statements of commitment fell short of market expectations. 

The yield on 10-year bonds declined for the seventh day in a row and fell to 1.77% amid persistent economic growth deceleration worries. 

Over the last five weeks, foreign investors have been trimming exposure to Chinese stocks amid growing realization that Chinese leaders are lacking urgency in implementing fiscal stimulus measures announced in late September. 

In addition, private companies are bracing for a sharp escalation in U.S. tariffs and trade barriers, which could shave off annual goods exports growth to less than 3% in 2025. 

 

China Indexes and Stocks 

The Hang Seng Index dropped 1.8% to 20,023.97, and the CSI 300 index fell 1.9% to 3,952.67. 

Property developers led decliners in Shanghai and Hong Kong after the latest high-powered meeting chaired by President Xi Jinping failed to release concrete plans to revive the flailing residential property market. 

Longfor Group Holdings Ltd. dropped 5.7% to HK $10.88, China Vanke decreased 6.2% to HK $6.24, and China Resources Land fell 2.6% to HK $23.40. 

Tech stocks fell for the second day in a row amid worries of faltering consumer confidence and a lack of progress in alleviating high youth unemployment. 

Alibaba Group dropped 1.3% to HK $86.85, Tencent Holdings declined 1.1% to HK $411.20, and Meituan eased 2.6% to HK $164.50.