(Bloomberg) — Chinese shares gave back earlier gains as a long-awaited joint ministry briefing on supporting the property market offered little new stimulus.
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The CSI 300 Index fell 0.1% at 11:18 a.m., reversing a 1.3% gain. A Bloomberg Intelligence gauge of Chinese developer stocks fell more than 8%. The Hang Seng China Enterprises Index has trimmed its gains to less than 1%.
China will expand a program to support “white list” projects to 4 trillion yuan ($562 billion), from about 2.23 trillion yuan already deployed, Housing Minister Ni Hong said in some of the most concrete remarks at the press conference. That’s after a Housing Ministry newspaper hinted that Beijing will “suffer a heavy blow”, raising market expectations.
The market’s reaction suggests authorities face a high bar to satisfy traders and revive a faltering rally. Skepticism has returned as Beijing has failed to unleash the fiscal firepower to match the surprise delivered by the central bank’s policy blitz in late September. Thursday’s briefing could end up as another disappointment after those from the Treasury Department and the state’s economic planner earlier this month triggered wild market swings with few details on spending.
“Equity investors are looking for big numbers to drive stocks higher, while the government focuses more on gradually reviving the economy and housing markets,” said Vey-Sern Ling, director of Union Bancaire Privee. “As long as expectations are not aligned, all press conferences will inevitably be disappointing.”
Data released Friday is expected to show the economy grew 4.5% in the third quarter from a year ago, according to economists polled by Bloomberg. That would be the least since March 2023, intensifying the debate over whether the stimulus measures announced so far will be enough to turn around the moribund economy.
Some investors are waiting for the second leg of the rally to resume as the CSI 300 Index heads for a correction. A delay in the market’s recovery would seem like deja vu to traders who have suffered several false dawns in recent years.
“Although it cannot be said that no new policy measures have been introduced at all, they can hardly give the market the feeling that a real breakthrough has been achieved,” said Shen Meng, director of Beijing-based boutique investment bank Chanson & Co. Investor confidence continues to shrink and sentiment remains low, which will increase pressure on Beijing to increase policy support in the future.”
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