Shanghai and Hong Kong Stocks Rise as Consumer and Property Gains Offset Tech Weakness

Equity markets in Shanghai and Hong Kong advanced on Monday, as gains in consumer and property shares outweighed weakness in the technology sector.

Investors parsed newly released Chinese inflation data that continued to signal deflationary pressures in the world's second-largest economy. China has grappled with subdued consumer price inflation for months, a trend that contrasts with the post-pandemic price rebounds seen in many other major economies and has kept real borrowing costs elevated for businesses and households. The figures have heightened attention on Beijing's policy direction, with market participants looking for indications of additional government measures to support growth.

Expectations of further fiscal support from Chinese authorities, combined with resilient export performance, contributed to the overall positive market sentiment. Consumer staples and real estate stocks led the advance, providing a counterbalance to selling pressure in technology shares. The property sector's gains come against a backdrop of prolonged weakness in China's real estate market, which has weighed on growth since 2021 and remains a central concern for policymakers despite a series of easing measures targeting mortgages, down payments, and developer financing.

China's benchmark Shanghai Composite Index and Hong Kong's Hang Seng Index both closed higher, reflecting the broad-based upward move driven by cyclical sectors. Technology shares, by contrast, faced headwinds amid a complex regulatory environment and lingering investor caution toward the sector following years of tightened oversight.

The persistent deflationary trend underscored ongoing challenges for Chinese policymakers, who have been navigating a complex economic landscape marked by uneven domestic demand and external trade uncertainties, including tensions with major trading partners. Investors remain focused on upcoming policy announcements for further clarity on the government's economic strategy, with particular attention on whether authorities will deploy additional consumption-boosting measures or infrastructure spending to sustain the recovery's momentum.

Source: Economic Times Markets