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Updated January 30th, 2024 at 11:45 IST

China stocks decline amid Evergrande woes and regulatory concerns

Hong Kong's Hang Seng Index witnessed a 2 per cent dip, and the Hang Seng China Enterprises Index lost 2.2 per cent.

Reported by: Business Desk
Nikkei
China stocks | Image:AP Photo
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China's stock market witnessed a downturn on Tuesday despite regulatory efforts aimed at bolstering market confidence. Fragile sentiment persisted as the liquidation of property giant China Evergrande added further strain to Beijing's already precarious real estate market.

The blue-chip index marked an 0.8 per cent decline, while the Shanghai Composite slipped by 0.6 per cent during the midday recess.

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Hong Kong's Hang Seng Index witnessed a 2 per cent dip, and the Hang Seng China Enterprises Index lost 2.2 per cent.

Broader Asian shares were also impacted by the decline in Chinese markets, and geopolitical tensions contributed to a cautious atmosphere ahead of the US Federal Reserve's meeting.

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The recent liquidation of China Evergrande Group through a Hong Kong court order cast a shadow over the market. Additionally, Hong Kong's leader expressed the intention to pass new national security laws, adding to the concerns already raised by Beijing's sweeping legislation in 2020.

Tech giants listed in Hong Kong faced a 2.7 per cent loss, and mainland property developers slumped by 3.5 per cent.

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Onshore markets saw declines in shares related to food & beverage and semiconductors each losing more than 2 per cent.

Ting Lu, Chief China Economist at Nomura, suggested that the current economic dip might worsen in the coming months. The prospect of additional measures to prevent economic decline is being closely observed.

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China's 10-year government bond yield reached its lowest point in more than two decades, dropping below 2.47 per cent. Investors anticipate further policy easing to support economic recovery following China's recent announcement of a cut to bank reserves.

As the market grapples with uncertainties surrounding Evergrande and regulatory developments, investors remain cautious about the economic outlook and potential impacts on various sectors.

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(With Reuters inputs)

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Published January 30th, 2024 at 11:45 IST

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