SHANGHAI: Chinese stocks ended the day nearly unchanged on Monday as the government’s plans to boost domestic consumption failed to spark investor interest, while they assessed mixed economic activity data.
China’s State Council unveiled on Sunday what it called a “special action plan” to boost consumption, with measures including increasing residents’ income and establishing a childcare subsidy scheme.
“Further details remain to be announced, such as the size and scope of much-awaited childcare subsidies, and how local governments could use special local government bonds to destock home inventory,” UBS economists, led by Zhang Ning, said in a note.
Policymakers elaborated on the action plan during a press conference on Monday, but Hong Kong shares had little reaction to the news. Onshore shares had already closed by the time the conference began.
China’s blue-chip CSI300 Index ended 0.2% lower, while the Shanghai Composite Index edged up 0.2%. The Hong Kong benchmark Hang Seng was up 0.8%.
Meanwhile, China’s property slump persisted in February, with official figures on Monday showing declines in prices, investment and sales. Retail sales picked up even as joblessness rose and factory output eased.
Chinese stocks end week higher on hopes of more consumption stimulus
“The property sector is especially concerning as key data are in the negative territory across the board, with new home starts growth worsening to -29.6% in January-February,” said Ting Lu, chief China economist at Nomura.
“Without a real stabilisation of the property sector there will be no real recovery of the Chinese economy,” Lu said.
UBS expects the Chinese government to ramp up additional policy stimulus throughout 2025 to offset the impact of external shocks, such as additional U.S. tariffs, on domestic imports.
Consumer staples stocks opened up 1% but reversed most gains by market close. Real estate shares closed up 0.7%.
Consumer-related shares led the onshore rally on Friday, after a city in northern China’s Inner Mongolia said that it would offer cash subsidies to couples having children.
Investors expect other regions to follow suit.
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