MSCI China Index faces correction as investors wait for Third Plenum, uncertainty prevails

From Yahoo Finance: 2024-06-27 01:34:00

The MSCI China Index is heading for a technical correction as traders pull back before a July meeting of Chinese leaders. The index dropped 2% on Thursday, down 10% from a May high, with Tencent and Alibaba leading the declines. Concerns over economic recovery and earnings outlooks loom as investors await the Third Plenum for policy shifts.

The Third Plenum, scheduled for July 15-18, is anticipated to bring supportive measures to boost the economy and deepen reforms. The MSCI gauge’s recent slide after a 32% surge from January revived worries of previous rallies overshadowed by selloffs amid geopolitical concerns and a slowing Chinese economy. Disappointment from the meeting could lead to further losses in Chinese stocks before US elections.

Investor sentiment has been dampened by a weakening yuan and a slide in AI stocks. Traders are also monitoring the US presidential debate between Trump and Biden for insights into their policies regarding Asia’s largest economy. A lack of risk appetite and uncertainty regarding policy direction from the Third Plenum have kept investors cautious approaching the half-year mark.



Read more at Yahoo Finance: MSCI China Set For Correction as Investors Reassess Plenum View