A rally that propelled Chinese equities into bull markets earlier this year has been faltering as concerns persist over a patchy economic recovery and earnings outlook.
MSCI Inc.’s key gauge for Chinese stocks has entered into a technical correction as policy measures fail to arrest a slide in earnings, increasing market scrutiny of a July meeting of the nation’s top leaders.
The MSCI China Index dropped 2.2% on Thursday, taking declines from a May 20 high to more than 10%. Tencent Holdings Ltd. and Alibaba Group Holding Ltd. were among the biggest drags on the gauge. The Hong Kong equity benchmark is also close to entering correction territory after falling 2.1%.
