Investors disappointed with Chinese stocks as earnings decline, market slumps over 8%

From Business Today: 2024-06-21 21:11:59

Investors are growing increasingly frustrated with Chinese stocks as earnings fail to pick up, leading to a market downturn. Analysts have slashed earnings estimates for key Chinese indexes, causing stocks to lose momentum and slump more than 8% since mid-May. Foreign investors are now selling off shares, causing concern and prompting a wait-and-see approach among fund managers.

Optimism around a corporate performance rebound in China earlier this year has faded, with the recent market slide bringing back memories of past selloffs. Earnings estimates for Chinese indexes like the Shanghai Composite and CSI 300 have dropped significantly this year, highlighting the weak growth environment in China. Overseas investors have sold off more than $5 billion worth of onshore stocks in the longest withdrawal streak since 2023.

Despite government support and hopes for an earnings recovery, Chinese stocks continue to struggle, prompting a bearish sentiment among investors. Market-supportive policies and buy calls from some strategists have not been enough to prevent a fifth week of decline for the CSI 300. The upcoming third plenum in July could provide a much-needed boost, but disappointment could result in an even bleaker outlook for Chinese stocks.



Read more at Business Today: China Earnings Pain Erodes Optimism Over Stock Market Rebound