Chinese stocks suffered their sharpest declines since the pandemic, as traders were left disappointed by Beijing’s economic stimulus plans.
Shanghai stocks plunged 5.3% overnight after posting significant gains following a week-long break the previous day. On China’s secondary exchange, the Shenzhen Composite Index dropped 6.7%, losing 140.07 points to close at 1,958.70.
The CSI 300 Index, a benchmark for the top stocks on Shanghai and Shenzhen exchanges, fell by as much as 7.4%, marking its largest drop since 2020.
Both mainland and Hong Kong stocks surged over 20% last month after China introduced measures to bolster its struggling economy. However, hopes for further support were dashed when a highly anticipated news conference in Beijing following the Golden Week holiday failed to deliver additional stimulus and provided limited details on existing plans.
Stephen Innes of SPI Asset Management said, “Let’s call it what it is — an abject failure — as Chinese shares opened sharply lower, signaling that the market is no longer buying half-hearted promises.”
Yeap Jun Rong of IG added, “The lack of new stimulus has caused disappointment. Many market participants were hoping for fiscal policies akin to the financial ‘bazooka’ announced in late September, but yesterday’s announcement fell short of those expectations.”
