China's Market Stumble: Weak Start to 2025

Chinese stocks fell sharply on the first trading day of 2025, marking their worst New Year start since 2016, influenced by disappointing factory data and awaiting policy support. The blue-chip CSI 300 Index and Shanghai Composite index both dropped significantly, reflecting wider market uncertainties and upcoming governmental policy expectations.

China's stock markets opened 2025 with significant losses, marking their weakest New Year commencement since 2016. The blue-chip CSI 300 Index plummeted by 2.9%, while the Shanghai Composite Index fell by 2.7%. Concurrently, Hong Kong's Hang Seng Index declined by 2.2%.

The downturn was catalyzed by weaker-than-anticipated factory activity in December, driven by falling export orders and growing concerns over trade conditions. Many investors remain cautious, anticipating more comprehensive policy support from government announcements expected in March.

Market unpredictability persists, compounded by potential tariff increases proposed by the Trump administration and the need for reinforced domestic demand to stabilize the economy. The yuan reached a 14-month low against the U.S. dollar, while investors leaned towards safe-haven bonds amid financial turmoil.

(With inputs from agencies.)