SINGAPORE: Chinese stocks skidded toward their heaviest losses in three weeks on Friday, after a readout from a major economic policy meeting repeated pledges to issue debt, lower interest rates and support growth but offered nothing new to excite investors.
China stocks range-bound as investors eye economic meeting
At the midday break, the Shanghai Composite index was down 1.49% at 3,409.87 points. The blue-chip CSI300 index slipped 1.82%, while the Hang Seng Index in Hong Kong dropped 1.66% to 20,057.69.
If sustained, the drops would be the biggest since late-November. All three indexes remain on track to notch a weekly gain, since the outlook for policy support remains promising.
A state media readout of the annual agenda-setting Central Economic Work Conference renewed promises to increase the budget deficit and maintain economic growth. Earlier in the week, the Politburo said it would switch to an “appropriately loose” monetary policy stance.
“Both the Politburo and CEWC look more like a policy recap of the stimulus measures in the past months rather than a new supporting deal to the economy,” ANZ analysts said.
Financials were down nearly 2%, consumer staples dropped 2.2%, real estate down 2.8% and healthcare lost 1.9% and all suffered selling in Shanghai.
Developer Longfor was the top loser in Hong Kong, falling 6.3%. Other property shares fell along with consumer-sensitive stocks such as Budweiser Brewing APAC.
“Investors took profit as the anticipated meeting ended, so the correction is natural,” said Huang Yan, fund manager at Sanghai QiuYang Capital Co. He expects the Shanghai benchmark to get support around 3,400 points as the market awaits a likely US rate cut next week.
Thirty-year Chinese government bond yields fell below 2% for the first time in morning trade – a negative signal for long-term growth expectations – and the yuan dipped to 7.2762 per dollar.
Source: Brecorder
