Chinese Equities Rally Falters, Asian Stocks Drop – Asia Market Wrap
Chinese stocks underperformed the rally that occurred while they were on holiday closure for a week, as investors counting on Beijing to produce more stimulus were underwhelmed. A key gauge in Hong Kong plunged the most in 16 years and European futures declined.
China’s benchmark CSI 300 opened up 11% as trading began after a weeklong holiday. With widely anticipated stimulus measures absent from a press conference in Beijing, the index pared gains to 2%, then rose again. A gauge of Chinese stocks in Hong Kong tumbled the most intraday since 2008 as some investors took profit and rotated to mainland shares.
Broader Asian equities dropped after Wall Street was dragged down by a tech selloff, geopolitical angst and bets on a smaller Federal Reserve rate cut. MSCI’s Asia-Pacific share gauge dropped the most in two months, the Treasury curve steepened and oil fell.
A briefing by China’s National Development and Reform Commission failed to deliver more stimulus measures after policy announcements before the Golden Week holiday break sent shares in China and Hong Kong surging. From JPMorgan Asset Management to HSBC Global Private Banking, numerous investors questioned the sustenance of that rally.
