HONG KONG: China’s blue-chip stocks hit a near 4-year low on Wednesday, as investors are gradually losing hopes for stimulus surprises and not willing to buy the dip, while Hong Kong shares rose tracking overnight Wall Street gains.
The blue-chip CSI 300 Index dropped 1.1%, dipping to its lowest closing level since February 2019, while the Shanghai Composite Index declined 1.0%.
Hong Kong’s Hang Seng Index rose 0.7%, and the Hang Seng China Enterprises Index climbed 0.4%.
China kept benchmark lending rates unchanged at the monthly fixing, matching market expectations, after the central bank kept its medium-term policy rate steady last week.
Analysts said investors sentiment is gloomy after last week’s Central Economic Work Conference fell short of offering great stimulus to bolster the faltering recovery.
A BofA Asia fund manager survey released on Wednesday showed more than 60% of investors would rather stick to a wait-and-watch approach or look for opportunities elsewhere than be exposed to China equities.
“Investor interest towards risk assets in China is shockingly low,” the survey said.
Yet J.P Morgan analysts noted that investors were likely neglecting the lagged impacts of the country’s fiscal stimulus due to be more visible in early 2024.
“The current low positioning sets the base of a rebound into early 2024,” they said.
Meanwhile, the United States has added 13 companies in China to a list of entities receiving US exports that officials have been unable to inspect, according to a government notice posted on Tuesday.
Sector wise, media, artificial intelligence-related firms, and brokers fell 3.1%, 3% and 2.7%, respectively, to lead the decline.
In Hong Kong, Alibaba Group gained 2.7% after the firm appointed a new CEO to head its domestic e-commerce arm.
Hang Seng Tech Index closed 0.5% higher.
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