SHANGHAI: Chinese stocks hit a new low for the year on Thursday, dragged by consumer-related shares as investor confidence remained depressed despite signs that parts of the economy are stabilising. Hong Kong shares also fell.
** China’s blue-chip CSI 300 Index dropped 1.6% by the lunch break, while the Shanghai Composite Index lost 1.2%, both touching their lowest levels this year.
** Hong Kong benchmark Hang Seng Index was down 2.0%.
** Data on Wednesday suggested the economy is stabilising, but analysts and investors are still concerned if the economy has truly bottomed out, with the property sector mired in a deep contraction.
** “We believe it is still too early to call the bottom as pent-up demand for travel and gatherings may fade notably after the Golden Week holiday and the property sector has yet to truly recover,” said Ting Lu, chief China economist at Nomura.
** “Market confidence in China’s economy remains depressed,” Lu said.
** China’s biggest private property developer Country Garden on Wednesday was due to pay a coupon payment on a bond, but bondholders told Reuters they were yet to receive it. Non-payment would put the developer at risk of default.
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** Meanwhile, liquor shares were down 2.8%, dragging consumer-related stocks.
** Shares of liquor giant Kweichow Moutai, dropped 4.9%, logging their largest daily loss in nearly a year.
** Foreign capital recorded net outflows of 7.5 billion yuan ($1.03 billion) via the northbound trading link in morning trade, on track to log the largest daily outflow in nearly one month.
** While most sectors declined, semiconductor shares were up 1.9%.
** In Hong Kong, electric vehicle makers Xpeng and Nio slumped more than 8%, following their American Depositary Receipts (ADRs) in New York.
** Nio is considering building a dealer network in Europe to speed up sales growth, sources told Reuters.
** Tech giants traded in Hong Kong were also down 1.9%.
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