(Bloomberg) — Chinese stocks fell after a much-anticipated meeting between U.S. President Joe Biden and Xi Jinping as traders saw only modest progress in strained relations and an update on new data on the world’s second-largest economy. Feel worried.
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The Hang Seng China Enterprises Index fell about 1% as of 2:16 pm local time, leading the decline among major Asian stock indexes. The index rose 4% in the previous session, in part as investors looked to the summit for catalysts. The benchmark CSI 300 index was expected to end two days of gains, falling 0.7%.
Hopes are high that Xi Jinping’s meeting with Biden will be a turning point after geopolitical tensions weighed down Chinese stocks for much of the year. While Biden said the talks were making progress in improving relations, traders appeared skeptical of the remarks. Since mid-Thursday, foreigners have begun selling mainland stocks again.
READ: Biden-Xi meeting delivers small victory and promises to improve ties
Investors said Biden’s repeated reference to Xi Jinping as a dictator in response to a question at a press conference could cast a shadow on progress made by both sides.
“China’s investment landscape is likely to remain complex in the short term,” said Manish Bhargava, a fund manager at Straits Investment Holdings in Singapore. He added that the meeting was a step in the right direction. Biden’s comments “referring to Xi Jinping” as a dictator are contributing to today’s decline in Chinese stocks. “
In a sign of how much work remains to be done, there is no evidence of progress on larger issues such as U.S. restrictions on microchip exports, tariffs or tensions in the South China Sea, where ships and aircraft from both countries have engaged in a series of provocative clashes.
There has been an increase in cooperation in some areas mentioned in the bilateral meetings. Shares in China Airlines rose after leaders agreed to significantly increase direct flights next year.
The housing sector continues to be a source of bad news, with data on Thursday showing home prices fell the most in eight years in October, suggesting the sector’s recession is worsening. economy.
David Chao, a strategist at Invesco Asset Management, said, “Investors may be taking profits after yesterday’s strong performance, but they are still trying to balance APEC between Xi Jinping and Biden. Positive developments at the meeting and mixed results from China’s monthly economic report.” in Singapore.
The Hang Seng Technology Index fell nearly 3% before recovering some of its losses. Xiaomi is the biggest drag. The stock plunged more than 6% as investors showed interest in the smartphone giant’s first electric vehicle, a five-passenger sedan with a panoramic glass roof.
Steven Leung, director of UOB Kay Hian Hong Kong Ltd, said today’s move could be a “sell on good news” following the development of electric vehicles, given the recent rise in Xiaomi’s share price. out”. He said investors will next focus on its earnings next week. Add to.
–With assistance from Charlotte Yang and Abhishek Vishnoi.
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