Wed Oct 09 06:02:04 UTC 2024: ## Chinese Stocks Plunge Amid Stimulus Concerns, Google Breakup Rumours

**Hong Kong, October 26, 2023** – Chinese equities took a nosedive on Wednesday, underperforming the Asian market as traders reacted to weak economic data and Beijing’s reluctance to commit to substantial stimulus measures.

The benchmark CSI 300 Index dropped as much as 7.4% before recovering partially following a report that China will hold a briefing on Saturday regarding fiscal policy. This downturn follows a surge in Chinese markets on Tuesday upon their return from the Golden Week holiday.

Concerns are mounting in China that the recent stimulus package may not be enough to convince investors of a sustained rally in the equity market. Chinese tourists spent less during the holiday, and reports suggest the nation needs to introduce policies to stabilize growth and expectations.

“For the markets to sustain enthusiasm, far more aggressive gestures for the new fiscal package or market stabilization mechanism might be necessary,” said Homin Lee, senior macro strategist at Lombard Odier.

The National Development and Reform Commission (NDRC) announced a meagre 200 billion yuan ($28 billion) in spending to be advanced from next year, falling short of analyst estimates of a 3 trillion yuan fiscal package. This lack of a substantial commitment has further dampened investor confidence.

“No further policies from the NDRC yesterday has disappointed the market,” said Steven Leung, executive director at UOB Kay Hian Hong Kong Ltd.

Meanwhile, US equity futures also slipped after a report that the US Justice Department is considering breaking up Google. Ten-year Treasury yields hovered around the key 4% mark, and oil prices stabilized after plummeting by the most in over a year.

Across Asia, New Zealand’s dollar and bond yields fell after the nation’s central bank delivered a 50 basis-point cut to its benchmark rate. The Reserve Bank of India left rates unchanged but shifted its monetary policy to neutral, boosting share prices.

The Fed’s cautious approach to rate cuts and the potential for continued global rate-cutting fueled investor conviction for lower rates, according to UBS Global Wealth Management.

**In other news:**

* Alimentation Couche-Tard Inc. submitted a new potential acquisition price of ¥7 trillion ($47.2 billion) to Seven & i Holdings Co., indicating a continued pursuit of takeover talks after its initial bid was rejected.
* South Korea will join FTSE Russell’s benchmark bond index, marking the culmination of months of official campaigning and a financial market infrastructure overhaul.

**Key market moves:**

* S&P 500 futures fell 0.2%
* Shanghai Composite fell 5.3%
* Euro Stoxx 50 futures fell 0.1%
* 10-year Treasury yields were little changed at 4.02%
* West Texas Intermediate crude rose 0.4% to $73.85 a barrel

The outlook for the markets remains uncertain, with volatility expected to continue into the fourth quarter.

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