SHANGHAI: Chinese stocks fell on Thursday, erasing gains in early trade as the government’s vow to support private businesses failed to excite investors as they demanded more concrete stimulus to aid the economy. Hong Kong stocks also weakened slightly.

China’s blue-chip CSI 300 Index and the Shanghai Composite Index closed down 0.7% and 0.9%, respectively.

Hong Kong’s Hang Seng Index slipped 0.1% while the Hang Seng China Enterprises Index dropped 0.3%.

China on Wednesday pledged to make the private economy “bigger, better and stronger” with a series of policy measures designed to help private business and bolster the flagging post-pandemic recovery.

“While the encouraging tone should be welcomed by private businesses, the supports may not be concrete enough to revive business confidence,” UBS analysts said in a note.

Chinese tech giants listed in Hong Kong finished 1.2% lower, after rising as much as 1.5%.

BofA became the latest bank to cut China’s economic growth forecast for this year to 5.1% on a disappointing second-quarter GDP growth and potential delay in forceful policy response.

The bank also said its latest Asia Fund Manager Survey shows that expectations for China lack hope, with a majority (57%) of investors bracing for new lows in China equities, undershooting the October-2022 lows.

China left its lending benchmarks unchanged on Thursday, after the central bank stood pat on a key policy rate earlier this week even as signs of a faltering economic recovery called for more stimulus.

Artificial intelligence stocks led onshore market’s decline, slumping more than 4%.

However, China property developers listed in Hong Kong rose more than 2% after Bloomberg News reported that Chinese authorities are weighing easing home buying restrictions in the country’s biggest cities.

All eyes are on an expected Politburo meeting later this month, when top leaders could chart the policy course for the rest of the year.