China Stocks Experience Lowest Trading Values in Four Years: Market Sentiment Shifts

China's Trading Values Decline

The daily turnover on China’s onshore markets has slumped to the lowest in four years, indicating investors are awaiting clearer signals on the policy front to support the economy. The combined value of shares changing hands on the Shanghai and Shenzhen exchanges slid to 472.9 billion yuan (US$66.1 billion) on Wednesday, the least since May 25, 2020, according to Bloomberg data. The average daily turnover stands at 610 billion yuan this month and 798 billion yuan this year.

Subdued Market Sentiment

In Hong Kong, trading plunged to HK$68 billion (US$8.7 billion) on Wednesday, a six-month low, as the (subdued trading mirrors subsiding interest in Chinese stocks"). As traders and investors face uncertainty in the economic growth and recovery, market sentiment continues to dwindle. Falling market turnover is a reflection of this slumping sentiment.

Possible Policy Changes Ahead

China will likely implement further measures to reduce housing inventory and support the property market to bolster domestic consumption. As exports, a crucial growth driver in the previous months, tend to soften, Patrick Pan notes that “investors need to brace for impact from lighter volumes.”