(Bloomberg) – Chinese stocks fell back on Tuesday after a sharp sell-off, as traders remained uneasy at the prospect of market-unfriendly policies under the president’s third term. President Xi Jinping.
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The Hang Seng China Enterprises Index, a gauge of Chinese stocks listed in Hong Kong, fell 0.7% at 10:09 a.m., extending Monday’s 7.3% plunge, pushing the index lower. The lowest level since 2008. China’s CSI 300 index also slipped. The weakness contrasted with the solid performance of global stocks, with US and European stocks ending Monday higher.
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The moves underscore investor anxiety after the nation’s twice-decade-long Communist Party congress, where Xi loyalists occupy key positions. Mr. Xi’s lack of control over the nation’s power structure suggests that policies like Covid Zero and state restrictions on private enterprise are likely to continue, undermining growth. expectations for the country’s financial assets.
“This is what usually happens after a big plunge – by the next day, the market will generally recover from its wounds and then decide,” said Hao Hong, partner and chief economist at Grow Investment Group. in which direction to go”. “Clearly there is no anchor for how low the market can go, very few people are buying right now.”
The yuan fell to its weakest since 2007 after the People’s Bank of China eased a tightly controlled currency fix by setting the exchange rate at a 14-year low.
Foreigners turned to be net buyers of Chinese stocks early Tuesday after a record sell-off in the previous session, when they were net sellers of 17.9 billion yuan ($2.5 billion) in mainland shares. through trading links with Hong Kong.
Meanwhile, news of the market’s sell-off barely appeared in China’s leading securities newspapers on Tuesday, with front pages dedicated to the following meetings and other key events. party Congress.
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