On Wednesday, China stocks experienced a downturn, primarily influenced by real estate shares, while Hong Kong shares surged, driven by tech stocks. The rating agency Fitch’s revision of its outlook on China to negative further compounded the market sentiment.
Ratings agency Fitch altered its outlook on China to negative on Tuesday, citing escalating risks to the country’s public finance outlook. However, China stocks were closed for the midday break before the release of this rating downgrade.
Weakening sales reported by several property developers in March hinted at persistent pressure on the real estate sector, contributing to the decline in real estate shares.
Investor attention is focused on a series of crucial economic data releases scheduled for this and the following week, aiming to discern potential policy directions.
During the midday break, the Shanghai Composite index retreated by 0.34% to 3,038.25 points, while the blue-chip CSI 300 index slid by 0.43%. Financial stocks, consumer staples, healthcare, and real estate registered declines ranging from 0.18% to 3.17%.
The Shenzhen index and the startup board ChiNext Composite index both saw declines of 1.46% and 1.87%, respectively, while Shanghai’s tech-focused STAR50 index dipped by 1.57%.
In contrast, Chinese H-shares listed in Hong Kong surged by 2.15% to 6,021.79, with the Hang Seng Index up by 1.88% at 17,144.54.
Across the region, MSCI’s Asia ex-Japan stock index strengthened by 0.74%, while Japan’s Nikkei index declined by 0.31%.
The yuan was quoted at 7.2306 per U.S. dollar, showing a 0.03% appreciation compared to the previous close of 7.2329.
Among the main gainers in the Shanghai Composite index were Shaanxi Construction Machinery Co, SEC Electric Machinery Co, and Ningbo Zhongbai Co, all recording gains of over 10%.
Conversely, the largest percentage losses in the Shanghai index were observed in Beijing Kawin Technology Share-Holding Co, Shanghai Prosolar Resources Development Co, and Shanghai Lianming Machinery Co, all declining by more than 10%.