From Fortune:

Chinese stocks cap dismal week, with Hong Kong’s gauge at global equity index ranking bottom. India’s valuation premium over China hits record as local shares’ meltdown pushes mutual fund closures to 5-year high. Hang Seng China Enterprises Index drops 11% in 2024, reinforcing a structural shift out of China.

Nasdaq Golden Dragon China Index slips 2.2% at US start of trading, extending losses to fifth consecutive day. $6.3 trillion wiped out from Chinese and Hong Kong stocks’ market value since 2021 peak. China ruling out massive stimulus for declining growth, leaving traders wondering when situation will improve.

HSCEI gauge records worst January performance in eight years. Signs of state funds buying ETFs fail to halt mainland’s benchmark losing run. China’s real estate sector remains a trouble spot while deflationary pressures build. US election on horizon impacts trajectory of US interest rates.

Asian fund managers cut allocation to China by 12 percentage points to net 20% underweight, lowest in over a year. Benchmark-tracking fund managers have sold a net $300 million of shares traded in mainland China and Hong Kong this month. State funds bought ETFs, but Chinese brokerage suspends short selling for some clients.

Beijing efforts to reassure investors met with skepticism. Premier Li Qiang touts hitting 5% 2023 growth target without massive stimulus at World Economic Forum. Loss of confidence severe, MSCI China Index cheapest versus S&P 500 gauge from forward earnings perspective. Short-term rebound bets have not come through.



Read more: Chinese stocks erased $6.3 trillion since 2021 peak