HONG KONG: China’s blue-chip stocks retreated for a second straight day on Tuesday, and Hong Kong shares dropped, as pessimism over China’s economic outlook widened while investors gave a lukewarm reaction to the Politburo’s meeting outcome.
China will release its July official manufacturing survey (PMI) on Wednesday. The country’s factory activity likely shrank for a third month, a Reuters poll showed on Monday.
The Politburo, a top decision-making body of the ruling Communist Party, pledged to pursue a “proactive” fiscal policy and reiterated the need for a “prudent” monetary framework, in the readout of the July meeting held on Tuesday.
However, the announcement did not detail efforts to boost the economy.
“The government recognizes that domestic demand is weak... The question on my mind is whether fiscal policy stance will change significantly in the 2nd half of the year to be much more supportive of economic growth,” said Zhiwei Zhang, chief economist at Pinpoint Asset Management.
Energy stocks led the decline, with CSI energy index and mainland oil and gas stocks listed Hong Kong down 2.7% and 2.9%, respectively, following an overnight drop in oil prices.
Meanwhile, Hong Kong property sector fell 2.8%, dragged by disappointing interim results of local commercial property giants.
The Shanghai Composite index closed down 0.43% at 2,879.30 while the blue-chip CSI 300 index fell 0.63%.
Financials, consumer staples, real estate and healthcare stocks all fell between 0.2% and 0.65%.
The smaller Shenzhen index ended down 0.17% and the start-up board ChiNext Composite index was weaker by 0.289%.
In Hong Kong, the Hang Seng index was down 235.43 points or 1.37% to 17,002.91. The Hang Seng China Enterprises index fell 1.54% to 5,986.69.
The Hang Seng energy index lost 2.8%, while the IT sector dipped 1.3%, the financial sector ended 0.67% lower and the property sector retreated by 2.75%.
Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.41%, while Japan’s Nikkei index closed up 0.15%.
Comments
Comments are closed.