HONG KONG: Chinese equities eased gains while Hong Kong stocks declined on Tuesday as the initial optimism over Beijing’s policy shift faded, with traders eyeing more detailed measures after disappointing trade data.
The blue-chip CSI 300 index closed up 0.7%, paring back gains after opening up 3.2%, while the Shanghai Composite index added 0.6%. The real estate sector climbed 1.3% and the consumer staples sector rose 1.9%, leading gains.
Hong Kong’s benchmark Hang Seng Index closed down 0.5%, after having risen by 3.2% earlier in the session. The tech index lost 1.4%. Sentiment was buoyant in morning trade after the Politburo, comprising of China’s top Communist Party officials, shifted the monetary policy stance to “appropriately loose” from “prudent” for the first time in over a decade to spur economic growth.
Authorities also vowed to stablise the stock and housing markets and adopt counter-cyclical adjustments to expand domestic demand and boost consumption. However, that optimism quickly waned after trade data pointed to weakness in China’s economy amid US tariff risks. Exports grew 6.7% year-on-year in November, missing estimates, while imports unexpectedly fell into contraction.
“It was a pleasant surprise that policymakers are adopting a more positive, pro-growth tone. But like the previous rounds, the following details and roll-out still remain to be seen amid the growth headwinds,” said Jason Chan, senior investment strategist at Bank of East Asia. “Investors don’t seem to have strong convictions now.” The market will now focus on this week’s Central Economic Work Conference, where key targets and policy direction will be set for next year, he said.
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