SHANGHAI: Chinese stocks fell on Wednesday, as an uneven economic recovery after China dropped the zero-COVID policy and some contradictory macro data in the first quarter kept investor sentiment weak.
** China’s blue-chip CSI 300 Index lost 0.4% by the end of the morning session, while the Shanghai Composite Index edged down 0.2%. ** The Hang Seng Index dropped 0.5%, while the Hang Seng China Enterprises Index declined 0.7%.
** China reported higher-than-expected first-quarter growth on Tuesday but some data pointed towards uneven recovery trends.
** Real estate developers lead declines with a 2% drop, after the Tuesday data showed property investment fell 5.8% from a year earlier.
** The data also showed factory output growth was just below expectations, while retail sales growth hit near two-year highs.
** “We caution some strengths, such as pent-up demand and catch-up production post the COVID ‘exit wave’, may fade sequentially in coming months,” said Goldman Sachs in a note.
** China is formulating plans to boost economic recovery and expand consumption, state planner spokesperson Meng Wei said on Wednesday.
** Amid the weak market sentiment, some investors continued to bet on AI stocks. Frenzy around OpenAI’s ChatGPT chatbot had boosted shares of Chinese companies in the tech, media and telecom (TMT) sector.
** Shares in media rose 2.6%, artificial intelligence added 2.4%, and semiconductors climbed 2%.
China, HK stocks mixed on growth data
** Some analysts expect the AI trade will become a main theme across 2023, while some others argue it is mainly speculation.
** Tech giants listed in Hong Kong retreated 0.9%, with Alibaba down 0.7%, even after Reuters reported that Chinese regulators are expected to fine Ant Group about a quarter less than the more than $1 billion initially planned and downgrade their charges against it, as they seek to end a years-long crackdown on marquee technology firms.
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