HONG KONG: China and Hong Kong stocks dipped on Wednesday, with investors cautious ahead of the US election, while also awaiting a top leadership meeting next week that could reveal fiscal stimulus details.
The European Union’s decision to significantly increase tariffs on Chinese-built electric vehicles also weighed on sentiment and dragged down new energy vehicles stocks.
China’s blue-chip CSI300 Index dropped 0.9%, while the Shanghai Composite Index dipped 0.6%. Hong Kong benchmark Hang Seng was down 1.6%.
On Tuesday, Reuters reported China is considering approving next week the issuance of over 10 trillion yuan ($1.4 trillion) in extra debt in the next few years to revive its fragile economy.
The potential package failed to impress the markets with analysts saying the size was in line with expectations while support for consumption remained modest.
More clues on the fiscal stimulus package may come from a meeting of China’s National People’s Congress, set for next week.
“The market has been eager to get a concrete number (of the fiscal stimulus package). Of course implementation is key, depending much on monetary transmission and consumption power,” said Linda Lam, head of equity advisory for North Asia at UBP.
At the close, liquor makers, financials and electric vehicle-related stocks were among top underperformers in mainland A-shares, down 1.9%, 1.3% and 1.3% respectively.
In Hong Kong, Chinese tech giants listed in the city lost 2.4%.
The US is finalising rules that will limit US investments in artificial intelligence and other technology sectors in China.
Investors are nervous about a tight US election race that could have huge ramifications for China, with Republican candidate Donald Trump vowing to impose a 60% duty on imports from China. Markets are also focusing this week on purchasing managers index readings from the country, due on Thursday and Friday, that would provide fresh clues on the health of the world’s second largest economy.
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