SINGAPORE: China and Hong Kong stocks hit their lowest in more than a week on Tuesday as the lack of details of Beijing’s fresh stimulus plans disappointed investors, while auto and battery makers supported the mainland blue-chip index.
The Shanghai Composite index logged its lowest close since Nov. 29, falling 0.73% to 3,361.49, having touched its lowest intraday level since Dec. 5 earlier in the session. Hong Kong’s Hang Seng index, which hit its lowest since Dec. 5 earlier in the day, shed 0.5% to close at 19,700.48.
China’s blue-chip CSI300 index rose 0.26%, helped by automakers and consumer staples gaining 0.8% and 1%, respectively.
China’s Central Economic Work Conference last week repeated pledges to support consumption and growth but shared no details to spur sentiments.
China’s leaders agreed to raise the budget deficit to a record 4% of its gross domestic product next year, while maintaining an economic growth target of around 5%, Reuters reported, citing two people with knowledge of the matter.
Investors tend to speculate heading into official meetings and then unwind positions, said Steven Leung, executive director at broker UOB Kay Hian in Hong Kong. Leung expects the Hang Seng to oscillate around 20,000 until the year-end.
“After the recent selloff, the market should find some support at this level... there’s not enough momentum to lift the index too much for the rest of the year.”
Mainland stocks are headed for their best year since 2016, while the Hang Seng is eyeing its largest calendar-year gain since 2017, with a 16% rise in the year so far. However, foreign investors have largely kept to the sidelines.
Official data showed a record $45.7 billion outflow from China’s capital markets last month, suggesting heavy foreign selling as Donald Trump’s re-election as the US president has investors bracing for tariffs and unpredictability.
The market is also closely monitoring the US Federal Reserve’s policy meeting on Dec. 17-18, with a rate cut expected on Wednesday.
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