Chinese stocks sink, with Shanghai down 6.6%, while other markets are mostly higher

[October 09, 2024]  By ZIMO ZHONG

HONG KONG (AP) — Chinese shares plunged on Wednesday, with Shanghai’s benchmark down 6.6% and Hong Kong’s sliding 1.5%, while other world markets mostly advanced.

European stocks opened flat. France’s CAC 40 rose 0.2% to 7,538.08, and Germany’s DAX was little changed at 19,070.69. Britain’s FTSE 100 climbed 0.5% to 8,227.54.

The future for the S&P 500 was 0.3% lower and that for the Dow Jones Industrial Average fell 0.2%.

Details of economic stimulus plans from officials in Beijing have failed to live up to lofty expectations that had built up after the central bank and other government agencies announced various policies to help revive the ailing property market and spur faster economic growth.

The Shanghai Composite lost 6.6% to 3,258.86 after it gained 4.6% Tuesday as it reopened from a weeklong national holiday. The CSI 300 Index, which tracks the top 300 stocks traded in the Shanghai and Shenzhen markets, gave up 7.1%.

The benchmark in the smaller market in Shenzhen dropped 8.7%.

Hong Kong’s Hang Seng index shed 1.5% to 20,618.79. That followed a plunge of more than 9% on Tuesday.

The government has set a target for about 5% annual growth this year, but the economy expanded at only a 4.7% pace in the last quarter and economists have been revising their estimates for the full year downward.

The moves announced in late September fueled a rally that has since fizzled. But analysts have pointed out that a news conference on Tuesday by China’s main planning agency, the National Development and Reform Commission, was unlikely to convey much information about government spending, which is the purview of the Finance Ministry.

That ministry is due to hold a briefing on Saturday that could provide further details on planned government outlays that so far have fallen short of what investors have been hoping for.

“A lack of new stimulus has been the cause of disappointment, with many market participants hoping that its fiscal policies will follow in the footstep of the financial ‘bazooka’ delivered in late-September, but there was clearly a step-down in yesterday’s announcement,” Yeap Jun Rong of IG said in a commentary.

The New York Stock Exchange, rear, is shown on Tuesday, Oct. 8, 2024, in New York. (AP Photo/Peter Morgan, File)

The Shanghai Composite is still up 5.2% from a year ago and more than 10% in the past three months. Hong Kong's index is up nearly 18% from a year earlier.

In Tokyo, the Nikkei 225 index advanced 0.9% to 39,277.96. Shares of the Japanese retailer Seven & i Holdings gained 4.7% after media reported that Canadian convenience store operator Alimentation Couche-Tard had increased its takeover bid by about 20%.

The Lower House of Japan's parliament was dissolved on Wednesday to pave the way for an Oct. 27 general election. Prime Minister Shigeru Ishiba hopes to consolidate support after taking office last week, amid signs the Liberal Democrats' ruling coalition remains shaky after Ishiba's predecessor, Fumio Kishida, stepped down following a slew of scandals among the party's lawmakers.

Australia’s S&P/ASX 200 gained 0.1% at 8,187.40. South Korea’s markets were closed for a public holiday.

On Tuesday, the S&P 500 rallied 1% and the Dow picked up 0.3%. The Nasdaq composite added 1.4%.

The 10-year Treasury yield edged down to 4.02 from 4.03% late Monday. The two-year yield, which more closely tracks expectations for what the Federal Reserve will do with overnight interest rates, slipped to 3.96% from 3.99%, late Monday, though it’s still near its highest level since August.

Oil prices extended gains as Hezbollah fired another barrage of rockets into Israel on Tuesday which heightening concerns over escalating tensions in the Middle East. Benchmark U.S. crude oil added 25 cents to $73.82 per barrel. Brent crude, the international standard, rose 32 cents to $77.50 per barrel.

In currency trading, the U.S. dollar edged up to 148.56 Japanese yen from 148.20 yen. The euro fell from $1.0961 to $1.0970.

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