China and Hong Kong Markets Slide Amid U.S.-China Yield Gap

Chinese and Hong Kong stocks fell due to increasing U.S.-China yield disparities and expectations of fewer U.S. rate cuts. The Shanghai Composite and other indices showed declines amid market caution and the impact of strong U.S. job data, leading to a global market correction.

Chinese and Hong Kong stock markets faced declines on Monday, as the growing U.S.-China yield gap and reduced expectations for U.S. rate cuts weighed heavily. The Shanghai Composite Index dropped 0.45%, while China's blue-chip CSI300 saw a 0.47% decrease, with its financial sub-index falling 0.8%.

Significant pressure was noted across tech giants, which plummeted by 1.38%, leading the market downturn. This sell-off was influenced by robust U.S. job data from the previous Friday, which diminished hopes for further rate cuts, sparking a broad correction on Wall Street.

Analysts from CICC emphasized that the increasing yield gap, driven by a decline in Chinese yields, has intensified market pressure. Trading is expected to remain range-bound due to caution over Hong Kong stocks, despite China's promising export and import data closing the year positively.

(With inputs from agencies.)