(Bloomberg) — Chinese stocks declined as trading kicked off in the new year after weak manufacturing and home sales data reinforced concerns about the economic outlook.
The CSI 300 Index fell as much as 1.1% to halt a three-day gain while the Hang Seng China Enterprises Index slid 1.8%, the biggest drop in over a week. Both indexes were among the region’s worst performers. Markets in Hong Kong and the mainland were shut on Monday for the new year holiday.
Sentiment took a hit after reports on Sunday showed China’s factory activity shrank in December to the lowest level in six months and a slide in home sales accelerated during the month. The weak data may fuel expectations for more stimulus from authorities after leaders vowed to maintain a pro-growth stance in 2024.
“The performance of PMI continued to be weak and the wait-and-see sentiment toward the introduction of mid- to long-term deepening reform policies has intensified,” said Shen Meng, a director with Beijing-based Chanson & Co. “Therefore, there is still more uncertainty as to whether the momentum at the end of last year can be sustained.”
Chinese stocks had gained in the last few trading sessions of 2023, helped by year-end position adjustments and a jump in foreign buying. Global funds withdrew 3.6 billion yuan ($505 million) from onshore equities as of 11:00 a.m. in Beijing on Tuesday.
READ: Year-End China Market Rally Takes Hold as Foreign Funds Pile In
