Investors brace as Beijing’s policy huddle tests durability of China stock rebound
With China’s stock rally fading, markets are pinning their hopes on the Central Economic Work Conference for signs of clearer policy support
“The market will be concentrated on policy signals mainly on how to stabilise growth and optimise the economic structure,” said Xu Chi, an analyst at Zhongtai Securities. “Fiscal policy will be much of the focus. If there’s any front-loading of fiscal spending or deficits, small-cap and high-beta consumer-discretionary companies such as retailers are expected to have trading opportunities.”
Attention is shifting back to economic fundamentals after a series of positives – including a re-rating of China’s tech sector, state-backed stock purchases and easing trade tensions – have been fully priced in, leaving limited room for further valuation expansion.
The CSI 300 Index has struggled to build on recent gains over the past month, as data pointed to a broadening slowdown and a protracted slide in property prices.