The Hang Seng Index dropped 0.3 per cent to 16,950.38 as of 11.15am local time, poised for a 2.5 per cent weekly loss. The Hang Seng Tech Index slipped 0.1 per cent, while the Shanghai Composite Index retreated 0.2 per cent.
Investors are now looking to a coming Politburo meeting for clues on how President Xi Jinping will fix the economic headwinds such as slumping home sales and weakening consumer spending. A high-stakes third plenary session for the Communist Party’s elite members that concluded last week failed to reinvigorate stocks by unveiling only policies that had been expected by investors.
“The economic fundamentals don’t lend too much support to the market and the key is to watch how the policy will change and how it will be implemented ,” said Song Yiwei, an analyst at Bohai Securities in Tianjin. “If the key Politburo meeting delivers signals of stabilising growth, there’s a chance that the market will continue to rebound. Otherwise, trading and sentiment will sluggish.”
The yield on China’s 10-year government bond dropped 1.4 basis points to 2.1955 per cent to hit a record low on Friday, as haven trades gained traction after the central bank unexpectedly cut both the policy interest rate and a short-term interest rate via the open-market operation this week.
“The rate cuts this week suggest continued support to achieve 5 per cent real GDP growth in 2024, leading another round of policy easing,” Goldman Sachs said in a research note. “We expect more policy easing to address concerns about weak domestic demand, especially on the fiscal and property fronts.”
Ugreen Group, which makes consume electronic products, surged 103 per cent from its initial public offering price to 43.10 yuan in Shenzhen on the first day of trading.
Other major Asian markets all rose. Japan’s Nikkei 225 climbed 0.5 per cent, while South Korea’s Kospi gained 0.7 per cent and Australia’s S&P/ASX 200 added 0.9 per cent.
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