China, HK stocks drop as investors await fresh stimulus

SHANGHAI: China and Hong Kong stocks dropped on Friday, as traders held off on increasing their market investments and awaited fresh stimulus measures from Beijing.

China, HK stocks pare losses amid consumption stimulus

China’s blue-chip CSI300 Index dropped 0.5% by the lunch break, while the Shanghai Composite Index lost 0.4%. Hong Kong benchmark Hang Seng was down 0.5%.

This week, the CSI300 Index has fallen by 0.3%, while the Hang Seng Index declined 3.1%.

“The key question in 2025 is how much stimulus policymakers will provide. It will largely depend on the impact from tariffs, as policymakers will do just enough to achieve the GDP growth target,” analysts, led by Larry Hu at Macquarie, said in a note.

“Few investors feel it’s a bull market, as corporate earnings remain soft amid weak domestic demand. The prevailing view is that liquidity will get looser in 2025 but nominal growth will stay sluggish.”

Real estate shares led the decline in the onshore market, down 1.5%, while some metals stocks advanced.

Country Garden has proposed a deal to its offshore creditors that will cut its debt by $11.6 billion, paving the way for the property developer to seek more time from the high court in Hong Kong to implement a restructuring plan.

Vanke’s onshore shares fell 2.9% on Friday, and its bond prices have been dropping since December last year. The company said on Thursday that it is fully committed to addressing its public debt maturing this year.

China’s central bank said on Friday it has suspended treasury bond purchases, triggering a jump in yields and spurring speculation that the move was aimed at defending a falling currency.