Chinese stocks retraced earlier gains as a highly anticipated joint ministry briefing on supporting the property market fell short of expectations, providing few new stimulus measures. The CSI 300 Index was down 0.1% by 11:18 a.m., reversing an initial rise of 1.3%. Additionally, a Bloomberg Intelligence index tracking Chinese developer stocks plummeted over 8%, while the Hang Seng China Enterprises Index reduced its gains to less than 1%.
During the briefing, Housing Minister Ni Hong announced plans to expand a program supporting “white list” projects to 4 trillion yuan ($562 billion), a significant increase from the approximately 2.23 trillion yuan currently deployed. This announcement came after hints from a housing ministry-run newspaper that Beijing would “hit a heavy punch combo,” raising market expectations.
However, the muted market response indicates that authorities are struggling to meet trader expectations and revive a faltering rally. Skepticism has resurfaced as the government has not matched the fiscal measures anticipated following the central bank’s unexpected policy adjustments in late September. Previous briefings from the Ministry of Finance and the state economic planner resulted in sharp market fluctuations with limited spending details, leading many to view Thursday’s briefing as yet another disappointment.
“Equity investors are looking for substantial headline figures to push stocks higher, while the government appears more focused on gradually stabilizing the economy and housing markets,” explained Vey-Sern Ling, managing director at Union Bancaire Privee. “As long as these expectations are misaligned, all press briefings are likely to end in disappointment.”
Economists surveyed by Bloomberg predict that data set to be released Friday will show the economy grew by 4.5% in the third quarter compared to the previous year, the slowest growth since March 2023. This has intensified discussions regarding the adequacy of the current stimulus measures to revitalize the struggling economy.
Investors are cautiously awaiting the next phase of the rally, as the CSI 300 Index appears to be heading toward a correction. A delay in market recovery may feel familiar to traders who have experienced multiple false dawns in recent years.
“While it’s inaccurate to say no new policy measures have been introduced, they hardly convey a sense of real progress,” remarked Shen Meng, a director at Beijing-based boutique investment bank Chanson & Co. “Investor confidence continues to wane, and sentiment remains low, which will increase pressure on Beijing to enhance policy support moving forward.”
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