(Bloomberg) -- Chinese stocks slid again on Tuesday as a broad package of measures to support the economy underwhelmed investors who continue to fret over the nation's strict Covid Zero policy.
The CSI 300 Index slumped 2.3%, the most since May 6, to be the worst-performing benchmark in Asia. The Hang Seng Index was down 2% as of 3:20 p.m. in Hong Kong after Chief Executive Carrie Lam said the financial hub will probably keep mandatory hotel quarantine requirements for incoming travelers until at least the end of June.
Traders focused on China's virus outbreaks and the strict curbs in place to control them chose to sell stocks even as Beijing rolled out a 33-point package that includes 140 billion yuan ($21 billion) in additional tax rebates and 300 billion yuan in railway construction bonds. Skepticism remains about whether the stimulus would provide a material boost to growth as Covid containment steps cause major disruption to business activity.
“Since supply-chain disruptions and loss of public confidence are areas that Beijing has little control, cutting taxes and easing monetary policy are not likely to solve the problems much,” said Chi Lo, senior market strategist for Asia Pacific at BNP Paribas Asset Management.
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READ: China's Stimulus Brings Limited Relief to Lockdown-Hit Consumers
The CSI 300 fell for a second day after capping its first back-to-back weekly gain since February amid an easing of lockdowns in Shanghai. A gauge of Chinese tech stocks listed in Hong Kong lost 4%.
Still, auto stocks rallied in China and Hong Kong on Tuesday as analysts expect the latest stimulus measures to boost the sector.
Here's what some other market watchers are saying:
‘No Bazooka'
“I can only say that the State Council's 33 measures are no bazooka that the market has been hoping to see after so many rounds of supportive rhetoric,” said Redmond Wong, market strategist at Saxo Capital Markets Hong Kong Ltd.
Ambiguity
“The positive impact may be limited” as policy guidance from Chinese authorities has “more or less” been fully priced into the markets and “the latest set of tax reliefs lack details which in turn creates ambiguity,” said Kelvin Wong, analyst at CMC Markets (Singapore) Pte. “The failure to break above 4,100 on the CSI 300 may see some profit taking after a short-term rally seen in the past two weeks.”
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