Shanghai Stocks Tumble as Confidence in Stimulus Falters

Mainland China stocks fell sharply on Wednesday, ending a 10-day winning streak as doubts grew about the effectiveness of planned economic stimulus measures. The Shanghai Composite index dropped 5.3%, while the CSI300 Index decreased by 5.8%. Key sectors like tourism and property suffered significant losses.

Mainland China stocks took a nosedive on Wednesday, reflecting waning confidence in upcoming stimulus plans aimed at boosting the economy, putting an end to a 10-day winning streak. The Shanghai Composite index plummeted by 5.3%, while the blue-chip CSI300 Index suffered a 5.8% decline.

The downturn marked a sharp reversal from the previous day's gains when markets rebounded after a week-long holiday despite a sluggish performance in Hong Kong. Investor expectations hinge on a significant stimulus package, speculated to be between 2-3 trillion yuan, but failure to meet these expectations could swiftly shift market sentiment.

Tourism and property sectors bore the brunt of the sell-off, with major indices in both sectors experiencing substantial drops. The broader market mood is cautious as spending remains subdued compared to pre-pandemic levels, indicating long-term recovery may take a concerted effort of strategic stimulus and market stability.

(With inputs from agencies.)