June 24, 2024

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Chinese stocks slump as economic concerns spoil investor mood

2 min read

(Bloomberg) — Chinese stocks dropped after traders returned from a long weekend as a slew of negative developments weighed on sentiment.

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The CSI 300 Index of mainland shares closed down 0.9% to its lowest level in more than six weeks after markets reopened from the Dragon Boat Festival holiday. A gauge of Hong Kong-listed Chinese shares was among the biggest decliners in Asia, falling as much as 2% before paring some losses.

The retreat came as weak travel spending and renewed concern over the property sector reinforced worries over the sustainability of China’s economic recovery. Geopolitical risks weighed on shares of electric vehicle makers as traders awaited the European Commission’s decision of provisional duties expected this week.

“The recent weekend holiday didn’t see as strong consumption as the previous May golden week, and weekly property sales are weak though that’s also volatile,” said Xin-Yao Ng, director of investment at abrdn. “These follow on from weak macro readings earlier like the NBS PMI and imports,” he said.

While domestic tourism spending rose 8.1% year-on-year during the extended weekend, the trend showed weakening momentum compared to other recent short holidays, according to Citigroup Inc. Average spending per traveler remained muted, analysts Brian Gong and Alicia Yap wrote in a note, weighing on travel-related stocks including Changbai Mountain Tourism Co.

Authorities’ recent emphasis to stabilize the property market failed to lift sentiment as Dexin China Holdings Co. became the latest builder to be wound up. Developer stocks entered a technical bear market last week amid skepticism over a broad support package unveiled by the central government.

An aerial video is showing a Country Garden residential area in Nanjing, China, on February 28, 2024. On the same day, Country Garden Holdings Limited is issuing a notice to the Hong Kong Stock Exchange that the company has been made aware of the winding-up petition filed by Ever Credit Limited in the High Court of the Hong Kong Special Administrative Region on February 27, 2024. This petition relates to an unpaid term loan of approximately HK $1.6 billion in principal and accrued interest between the petitioner, Ever Credit Limited, and Country Garden Holdings Limited. (Photo by Costfoto/NurPhoto via Getty Images)

A residential area from Country Garden, which was hit with a winding-up petition in February. (Costfoto/NurPhoto via Getty Images) (NurPhoto via Getty Images)

“The overall weak market due to lowered hope of a rate cut from US this year — combined…

2024-06-11 03:15:48

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