HONG KONG: Chinese stocks extended their fall on Monday after data showed unexpected weakness in consumer spending, while investors anticipated central bank cuts amid a policy vacuum.

China’s blue-chip CSI300 index declined 0.54% at close, adding to last week’s 1% retreat. The Shanghai Composite index lost 0.16% to 3,386.33.

The consumer staples sector lost 0.66%, the real estate index slid 2.22% and the healthcare sub-index eased 1.09%.

Hong Kong’s Hang Seng Index lost 0.88% to 19,759.49.

Data released on Monday showed China’s consumption slowed more than expected in November. Retail sales grew by just 3% last month, much slower than October’s 4.8% rise and economists’ forecast of 4.6%.

Industrial output grew 5.4% year-on-year in November, roughly the same as in October.

This reinforced the disappointing credit data, which showed that new bank lending in China rose by far less than expected in November as loan demand remained muted despite the recent stimulus.

These data showed activity improvement stalled into year-end, with Citi analysts saying that the slowdown will likely continue going into 2025 with deflation dragging on.

China’s Politburo and Central Economic Work Conference concluded last week with supportive tone, but without any breakthrough or concrete numbers, and the next two months could be a policy vacuum until the National People’s Congress meets in March, they added.

Still, Beijing is set to stay accommodative to address growth risks and the People’s Bank of China (PBOC) could deliver a 50-basis-points reserve requirement ratio cut before the end of the year, Nomura said.