SHANGHAI: China and Hong Kong stocks closed nearly unchanged on Wednesday, as investors weighed profit-taking from the recent tech rally against the potential effects of Beijing’s measures to stimulate consumption.
China’s blue-chip CSI300 Index held its ground by market close, while the Shanghai Composite Index edged 0.1% lower. Hong Kong benchmark Hang Seng edged 0.1% higher.
“Last week marked the first instance of material hedge fund profit-taking across Hong Kong and China since the beginning of the recent rally,” Morgan Stanley traders said in a note to investors. Hedge funds have nearly fully unwound their buying in onshore shares since mid-January, but only around 30% of inflows into Hong Kong shares have been reversed, the traders said.
Shares of China’s artificial intelligence companies were down 2% while Hong Kong’s tech index dropped 1.1%. The two sub-indexes have risen 13% and 35%, respectively.
Shares of Xiaomi, the world’s third-largest smartphone maker, rose 0.7% after it reported an almost 50% jump in fourth-quarter revenue, beating analysts’ estimates, and also raised its target for electric vehicle deliveries.
Meanwhile, electric car maker Xpeng slumped 5.8% following the release of its quarterly results on Tuesday. “We expect China’s growth momentum to moderate after a strong start to 2025, as the US tariffs start to bite, and the effect of policy stimulus fades,” said Jacqueline Rong, chief China economist at BNP Paribas.
Last week, China unveiled an action plan aimed at boosting consumption, with measures including increasing residents’ income and establishing a childcare subsidy scheme.
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