China, Hong Kong stocks extend losses, focus on stimulus
China and Hong stocks extended losses on Wednesday, with frail economic data continuing to weigh on sentiment as investors wait for meaningful stimulus as the next catalyst.
SHANGHAI:China and Hong stocks extended losses on Wednesday, with frail economic data continuing to weigh on sentiment as investors wait for meaningful stimulus as the next catalyst.
China's blue-chip CSI 300 Index dipped 0.42%, and the Shanghai Composite Index edged down 0.25%. Hong Kong's Hang Seng Index dropped 1.23%, and Hang Seng China Enterprises Index fell 1.30%.
China's fiscal revenues grew 13.3% in the first six months of 2023 from a year earlier, slower than a 14.9% rise in the first five months, finance ministry data showed.
"With one weak print after another, economic surprises in China have cratered, fueling calls for more than marginal policy stimulus," BofA Securities said in its July Asia Fund Manager survey.
According to the survey, an overwhelming 81% of participants were looking for monetary easing to kick in. Meanwhile, eight in 10 investors sided with a structural de-rating view for China equities. Yet some sell-side analysts are more positive. Hong Kong stocks' valuations are still well below their five-year averages while the outlook for earnings growth in 2023 is good, HSBC analysts said in a note, expecting a turnaround of Hang Seng index in the second half of the year.
Hang Seng Tech Index lost 1.7%, setting for a three-day losing streak. In mainland A-shares, photovoltaic firms dived 1.5% to lead the declines.