Chinese stocks hit 7-month low，HK shares sink amid deflation fears, Asia weakness

China Renaissance Holdings

09/09/2024 09:39

(Update prices)
       SHANGHAI, Sept 9 (Reuters) - Chinese stock benchmarks
dropped more than 1% to seven-month lows on Monday as weak
inflation data deepened economic worries, while Hong Kong shares
sank amid gloomy regional sentiment.
    China's blue-chip CSI300 index  .CSI300  ended down 1.2%,
hitting the lowest level since early February. The Shanghai
Composite Index  .SSEC  was down 1.1%. Hong Kong's Hang Seng
Index  .HSI  lost 1.4%.
    Latest data showed that China's consumer prices index
accelerated in August to the fastest pace in half a year, as
food prices rose due to weather disruption, but was short of
market expectations. Producer price deflation worsened,
reflecting the underlying trend of a struggling economy. 
    The inflation data stoked expectations of further easing
from authorities to stimulate growth, pushing Chinese long-dated
bond yields  CN30YT=RR  to record lows and weakening the yuan
 .CNY=CFXS . 
    "It's been a good trade to be long Chinese government bonds
and underweight equity markets so far this year, and these
numbers don't suggest anything has changed," said Ben Bennett,
head of investment strategy and research at LGIM.
    Highlighting fears that deflation could be entrenched,
China's energy  .CSIEN , raw materials  .CSIASMI  and metal
 .CSISNMIM  stocks slumped. 
    "The lack of conviction around China's economic recovery
continues to leave investors shunning," Yeap Jun Rong, market
strategist at IG, said in a note to clients. 
    Property  .HSMPI  and tech  .HSTECH  led the decline in Hong
Kong, where sentiment was also dampened by a 66% plunge in the
shares of China Renaissance Holdings  1911.HK , which resumed
trading after a 17-month suspension.     
    ** Around the region, MSCI's Asia ex-Japan stock index
 .MIAPJ0000PUS  fell by 1.32%, while Japan's Nikkei index
 .N225  was down 1.82%.
    ** China's blue-chip CSI300 index  .CSI300  was down 1.19%,
with its financial sector sub-index  .CSI300FS  1.38% lower, the
consumer staples sector  .CSI000912  down 1.3%, the real estate
index  .CSI000952  down 1.44% and the healthcare sub-index
 .CSI300HC  down 0.12%.
    ** The smaller Shenzhen index  .SZSC  ended down 0.59% and
the startup board ChiNext Composite index  .CNT  was up 0.063%.
    ** At the close of trade, the Hang Seng index  .HSI   was
down 247.34 points or 1.42% at 17,196.96. The Hang Seng China
Enterprises index  .HSCE  fell 1.68% to 6,002.91.
    ** The sub-index of the Hang Seng tracking energy shares
 .HSCIE  dipped 4.6%, while the IT sector  .HSCIIT  dipped
1.06%, the financial sector  .HSNF  ended 1.28% lower and the
property sector fell 0.78%.

 (Reporting by Shanghai Newsroom; Editing by Subhranshu Sahu and
Mark Potter)
 ((samuel.shen@tr.com))