(Bloomberg) — Chinese stocks slumped as domestic traders returned from the Lunar New Year holiday, sparking market caution that offset strong travel and spending data.
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The benchmark CSI 300 index opened 0.8% higher on Monday, but those gains were erased within minutes of trading. The move follows gains seen offshore during mainland China’s shutdown from February 9 to 16. Hong Kong stock indexes have risen nearly 5% in three sessions since trading resumed on Wednesday, while the Nasdaq Gold Dragon China Index rose 4.3% last week.
Monday’s trading shows deep doubts persist about the long-term prospects of China’s market, as the broader economy struggles with deflation and a real estate crisis. Traders are hoping for further policy support across the monetary and fiscal sectors, on top of the reserve requirement reductions already in place.
Domestic stocks rose ahead of the holidays as authorities sought to restore investor confidence, with increased purchases using government funds, a series of regulatory adjustments to ease selling pressure, and a sudden change in the head of the securities regulator. Ta. The benchmark CSI300 index rebounded from a five-year low, rising 5.8% in the week before the session.
Still, the CSI 300 gauge has lost more than 40% of its value since its peak in 2021, hurt by China’s strict COVID-19 measures, regulatory crackdown, uneven economic recovery and geopolitical tensions. have lost. Global funds are exiting Chinese stocks and seeking alternatives in other markets such as India and Japan.
The Hang Seng China Enterprise Stock Index fell more than 1% on Monday.
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