China stocks flat as consumer prices contract; Country Garden tumbles

CIFI Holdings (Group)

09/11/2023 08:51

(Updates to market close)
    By Summer Zhen
       HONG KONG, Nov 9 (Reuters) - Chinese stocks closed flat
on Thursday after latest consumer prices data revived worries on
recovery, while investors weighed developments in the property
sector and other stimulus measures.
        The blue-chip CSI 300 Index  .CSI300  and the Shanghai
Composite Index  .SSEC  ended a wobbly session largely
unchanged. Hong Kong's Hang Seng Index  .HSI  edged down 0.3%.
  
        Data showed China's consumer prices dipped back into
contraction and factory-gate deflation deepened in October as
domestic demand struggled, casting a shadow on the outlook for
broader recovery in the world's second-largest economy.
        However, the consumer demand is not read too negative,
analysts said.
  
    "What we are seeing today is mainly the result of a supply
excess, rather than a collapse in demand," said Robert Carnell, 
regional head of research for Asia-Pacific at ING.
        Analysts said overall investor sentiment is marginally
picking up as China's economic data shows signs of stabilisation
and U.S. is likely pausing rate hikes.
        Shares of embattled property giant Country Garden
 2007.HK  closed down nearly 10%, giving up almost all of the
previous day's gains on the back of a report that Beijing had
asked Ping An Insurance to take a controlling stake in the
homebuilder.
    Ping An subsequently said in a statement to Reuters it has
"not been asked by (the) government to takeover Country Garden".
    Ping An's Hong Kong-listed shares  2318.HK  fell 1.3% while
its mainland A shares  601318.SS  went down 3%
    Stocks of other Chinese developers also fell, with the Hang
Seng Mainland Properties Index  .HSMPI  dropped 4.2%.
    Toxic assets or bankruptcy companies usually go to
distressed asset managers in China, BofA analysts said in a
note.
    Previous experience shows Ping An is "likely wary of
becoming involved in (property) company operations and taking
excessive responsibility" which could impact its financial
stability, they said.
    On the flip side, server maker Inspur Electronic Information
Industry  000977.SZ  surged 10% after local media reported
Nvidia  NVDA.O  is planning to release three new chips for
China.

 (Reporting by Summer Zhen; Editing by Lincoln Feast,
Muralikumar Anantharaman and Varun H K)
 ((summer.zhen@thomsonreuters.com; 852-3462-7739;))