Bearish signals intensify for Chinese stocks due to economic and geopolitical risks

From Yahoo Finance: 2024-07-08 00:35:00

Bearish signals are mounting for Chinese stocks ahead of a key policy meeting, as the Hang Seng China Enterprises Index falls, approaching a technical correction. The rally in Chinese equities has lost momentum due to economic uncertainty and geopolitical risks. Stimulus measures have had little impact on the property sector and consumer confidence.

Investors are cautious as Chinese onshore investors experience losses and uncertainty. State funds may have stepped in to boost confidence ahead of the plenum. Although global funds have light positions in Chinese equities, cheap valuations create potential for a rebound if positive surprises arise. Chinese stocks and India peers are seen as likely outperformers in Asia in the second half of the year.

MSCI Inc.’s key gauge of Chinese stocks has fallen into a technical correction, along with developer shares and the Hang Seng Tech Index. Despite challenges, there is optimism for a rebound in Chinese stocks if positive surprises come from policy meetings and the Federal Reserve’s interest-rate path. About a third of Asia-based strategists and fund managers surveyed by Bloomberg News see potential for outperformance in Chinese equities in the near future.



Read more at Yahoo Finance: Bearish Signs Intensify for Chinese Stocks Ahead of Third Plenum