(Bloomberg) — Chinese stocks in Hong Kong slumped further Monday toward their lowest level in almost two decades, as an absence of fresh economic stimulus and market support measures deepened investor pessimism.
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The Hang Seng China Enterprises Index fell as much as 2.2%, edging closer to a level unseen since 2005 and making it one of Asia’s worst-performing key indexes. Chinese tech behemoths including Meituan and Tencent Holdings Ltd. led the declines.
The continued selloff in Chinese shares is in stark contrast to a more optimistic Wall Street, where the S&P 500 Index climbed to a record on Friday for the first time in two years. It also came after China’s commercial lenders kept their benchmark lending rates unchanged, a move that follows the central bank’s recent decision to maintain borrowing costs but may disappoint investors hoping for more aggressive stimulus.
The latest declines may be attributable to “a lack of catalysts in the near term and outflows to more attractive alternatives in the region,” said Marvin Chen, a Bloomberg Intelligence analyst. “Global markets have been surging on the chip sector, and this is an area where China and the rest of the world may run on separate tracks due to geopolitical tensions.”
The mood is similarly fragile in the mainland Chinese market, where the benchmark CSI 300 Index dropped as much as 0.6% Monday, poised for a second straight session of losses.
The gauge of Chinese stocks listed in Hong Kong has lost nearly 13% so far this year, while the S&P 500 has gained 1.5%. HSCEI is the worst performer globally among more than 90 equity indexes tracked by Bloomberg.
A confluence of factors have driven the swoon in Chinese stocks since 2024 began, ranging from a deepening housing slump to stubborn deflationary pressures, as well as Beijing’s reluctance to use aggressive monetary and fiscal measures to revive growth. Uncertainties about the trajectory of US interest rates, the threat of an imminent selloff in local stock derivatives and concerns about tighter regulatory oversight have added to the pessimism.
READ MORE: China’s $6.3 Trillion Stock Rout Getting Uglier by the Day
–With assistance from John Cheng.
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