China stocks worst ever after Congress as doomsday remains

(Bloomberg) – Chinese stocks traded in Hong Kong are posting their worst performance ever after the Communist Party Congress after this year’s leadership rally dashed hopes for policies. more market-friendly.

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The Hang Seng China Enterprises Index fell 4.3% as of 2:31 pm in Hong Kong. That number pushed its loss for the week to more than 9%, the highest in any five-day period following a party meeting since the gauge was introduced in 1994. The index has since fallen to a low. lowest since the 2008 global financial crisis in history on Monday and on track for a fourth month of decline.

Traders are struggling to determine how long the road map will last after the lack of supportive policies for the real estate sector was defeated and the congress’ submission to the Covid Zero strategy caused the market to fall. school demoralized. While sentiment seems to have stabilized somewhat over the past three days, continued losses on Friday dampened hopes of a sustained recovery.

“The market is still in a downtrend” due to disappointment from the party congress, weak consumption, lackluster industrial profits and the outbreak, said Yan Kaiwen, analyst at China Fortune Securities Co. sporadic Covid outbreak across the country, Yan Kaiwen, an analyst with China Fortune Securities Co., said Friday’s sell-off was “mainly due to weak sentiment. “

The expiry of monthly futures and options contracts for the China Hang Seng index as well as a series of earnings announcements fueled market volatility on Friday. Automaker BYD and Industrial and Commercial Bank of China – the world’s largest bank by assets – are among them as a result of the report.

At last week’s twice-decade-long meeting, President Xi Jinping lined up leadership with allies, limiting the scope of opposition to his strategies. Confidence is running low, especially among international investors, who raked in a record $2.5 billion in mainland equities on Monday alone.

The Hang Seng Technology Index lost as much as 6% on Friday. The top US official overseeing export controls said he expected an agreement with global allies to limit shipments of chip-making equipment to China in the near term. Such a move – if achieved – would expand Washington’s efforts to keep China’s advanced semiconductor technology away from its military.

On the mainland, China’s benchmark CSI 300 index fell 2.3% on Friday, bringing losses for the week to more than 5%.

“The drop is only part of an extension from Monday as the market feels uncertain and uncertain about the economic outlook under leadership,” said Ryan Chan, deputy director at Eddid Securities and Futures Ltd. new,” said Ryan Chan, vice president at Eddid Securities and Futures Ltd. worse.”

READ: Xi’s $6 trillion roadmap shows how China’s market serves the Party first

However, with valuations at historic lows, market watchers are divided on the outlook. Morgan Stanley slashed its targets on key China capital gauges while JPMorgan Chase & Co. said the sell-off was a buying opportunity.

Justin Tang, head of Asia research at United First Partners, said: “The congress has clearly been the biggest factor affecting the stock market over the past week. “It will continue to fluctuate unless we hear the opposite.”

– With support from Catherine Ngai and Chloe Lo.

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