Chinese Stocks Decline As 2024 Growth Target Fails To Impress

(Bloomberg) -- Chinese stocks in Hong Kong fell Tuesday morning, as investors shrugged off the government’s growth target of around 5% for the year.

The Hang Seng China Enterprises Index slid as much as 2.6%, the steepest in more than a month, as technology stocks led decliners. On the mainland, the benchmark CSI 300 Index swung between gains and losses, reflecting market disappointment to the opening of the country’s annual National People’s Congress.

Premier Li Qiang unveiled the annual goal for gross domestic product growth while delivering his first work report to the national parliament. The growth target matches last year’s figure.

Traders are likely to show some disappointment with China’s targets for GDP growth and budget deficit, said Xin-Yao Ng, an investment director at abrdn Asia Ltd. “Investors still will like more forceful fiscal measures to boost the economy,” he said. “Government spending, at least based on this, doesn’t seem to provide an added boost to the economy.” 

Investors also have been counting on Beijing to address the nation’s property crisis and lay out plans to bolster consumer demand. Policies from the gathering will test the strength of China’s nascent stock market rebound, which had been mostly fueled by hopes for more support measures.

For the first time since 2019, the work report omitted the slogan that “housing is for living in, not speculation.” The phrase has consistently been used by officials since 2016 as a means to signal Beijing’s intention to cool an overheating market.

A Bloomberg Intelligence gauge of developer shares dropped as much as 2.9%, poised for its fifth straight session of declines. 

Chinese equities have rebounded in recent weeks as a growing list of support measures helped alleviate bearish sentiment that had sent the mainland benchmark CSI 300 Index to a five-year low. The gauge has gained more than 3% so far in 2024.

Read more: China Needs ‘Forceful’ Measures to Hit 5% GDP Target, Funds Say

--With assistance from Charlotte Yang.

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