China and Hong Kong Stocks Slump Amid Stimulus Uncertainty

China and Hong Kong stock markets experienced a drop as traders hesitated over further investments, anticipating new economic stimulus measures from Beijing. Key indices witnessed declines, with soft corporate earnings and fluctuating liquidity posing challenges. Meanwhile, real estate share values faced significant pressures.

China and Hong Kong stock markets witnessed declines on Friday as investors held off on committing more funds, eyeing potential stimulus measures from Beijing. China's blue-chip CSI300 Index fell 0.5% by mid-day, while the Shanghai Composite Index and Hong Kong's Hang Seng decreased by 0.4% and 0.5%, respectively.

This downturn adds to the week's overall decline, with the CSI300 dropping 0.3% and the Hang Seng sliding 3.1%. Analysts, including Larry Hu of Macquarie, note that the extent of forthcoming economic stimulus in 2025 remains uncertain, largely influenced by tariff impacts.

The sentiment across the market remains bearish due to sluggish corporate earnings and weak domestic demand. Despite this, the hope for looser liquidity in 2025 persists. Real estate shares took significant hits, while some metals saw gains. Additionally, China's central bank's halt on treasury bond purchases raised yields and speculation about currency defense.

(With inputs from agencies.)