Hong Kong Stocks React to China's Disappointing Stimulus Strategies

Hong Kong stocks experienced a sharp decline as the market reopened after a holiday, reflecting investor disappointment with China’s fiscal stimulus announced by the finance ministry. The Hang Seng Index decreased 1.7 percent to 20,900.38 at 9:59 AM local time, while the Hang Seng Tech Index fell by 3.7 percent. The mainland benchmarks, however, performed more favorably; the CSI 300 Index rose 1 percent and the Shanghai Composite Index went up 0.9 percent.

Shares of Chow Tai Fook Jewellery Group plummeted by 8 percent to HK$6.93, and Anta Sports Products tumbled 7.2 percent to HK$92.85. Additionally, major corporations like Alibaba Group Holding and Tencent Holdings saw declines of 1.8 percent and 1.9 percent, respectively.

During a closely watched press briefing, finance minister Lan Fo'an indicated plans for increased debt sales aimed at managing local-government risks. He suggested that local governments might issue bonds to acquire unsold housing units, contributing to stabilization in the property market. Furthermore, he noted that there was potential for more fiscal support, given the country's capacity to widen the budget deficit, although specifics were not disclosed.

The deflationary trend in China has also negatively impacted market sentiment, with consumer inflation slowing to 0.4 percent in September, down from the previous month's 0.6 percent. Producer prices have decreased 2.8 percent for the 24th consecutive month, according to reports from the statistics bureau.

In contrast, other prominent Asia-Pacific markets saw gains, with South Korea’s Kospi and Australia’s S&P/ASX 200 both climbing by 0.5 percent, while Taiwan’s Taiex added 0.1 percent. Japan's market remained closed for a public holiday.