While equities rallied in recent weeks after a series of policy announcements designed to support the economy, enthusiasm over a stimulus-driven equity surge is cooling due to the lack of any further major initiatives at a key policy meeting Tuesday. A growing number of strategists and fund managers say Beijing needs to back up its spending pledges with real money, while others caution that the rally had gone too far too fast after benchmark indexes surged more than 30% in a matter of days.
Chinese stocks listed onshore suffered their biggest drop in more than four years as traders grew impatient over the pace of Beijing’s stimulus measures and weak holiday-spending data hurt sentiment.
The CSI 300 Index plunged 7.1%, erasing its advance from Tuesday, when mainland markets reopened after the Golden Week holidays. While the gauge pared declines after the Ministry of Finance said it would hold a briefing on fiscal policy, selling pressure resumed to hand the measure its first loss in 11 days. An index of Chinese stocks listed in Hong Kong fell further after sliding more than 10% Tuesday. Meanwhile, the Golden Dragon index of US-listed Chinese stocks declined 3.7%.
