Chinese language shares publish first annual acquire since 2020, HK ends 4-year rout

By Jiaxing Li

Hong Kong (Reuters) – Chinese language shares registered their first annual acquire following an unprecedented three-year decline regardless of a dip on the ultimate buying and selling day of 2024, whereas Hong Kong shares ended the 12 months larger, supported by optimism over coverage assist.

The blue-chip CSI 300, monitoring the most important firms listed in Shanghai and Shenzhen, rose 14.7% this 12 months, breaking a shedding streak since 2021 set off by the COVID-19 pandemic, property sector woes and weak client confidence.

The Shanghai Composite Index gained 12.8% in 2024, ending a two-year decline. Hong Kong’s benchmark Hold Seng Index closed the 12 months’s ultimate session up 0.1%, for an annual acquire of 17.7% that ended 4 consecutive years of losses.

“Throughout the equities markets, China’s efficiency got here as a optimistic shock to many traders,” analysts at Worth Companions mentioned in a observe this week.

“Numerous supportive measures introduced through the second half of the 12 months, which focused financial coverage, the property market, and capital markets, largely surpassed expectations and overshadowed ongoing financial considerations,” the analysts mentioned.Chinese language authorities have carried out a number of the boldest measures since September, together with rate of interest cuts, residence buy incentives and funding schemes for inventory shopping for, to bolster the struggling economic system and restore home confidence.

Stabilising the capital market has turn out to be a coverage requirement, and the final consensus is that the market is bottoming out, China Asset Administration mentioned in a observe.

With an advance of 34.7%, banking shares led the onshore market good points this 12 months, because the 4 largest state banks reached multi-year highs.

The chip sector surged 53.9% as home traders boosted holdings in native semiconductor makers amid tightening U.S. chip restrictions.

Nonetheless, mainland shares weakened on the 12 months’s ultimate buying and selling day, with the CSI benchmark falling 1.6% after knowledge confirmed China’s manufacturing facility exercise grew at a slower tempo in December amid rising commerce dangers.

The market is within the ultimate part of “coverage expectation-driven” buying and selling, following Chinese language leaders’ key conferences this month, Dai Qing, a strategist at Changjiang Securities, mentioned in a observe.

Looking forward to 2025, dividend-paying shares might nonetheless outperform the broader market within the brief time period, particularly when U.S. President-elect Donald Trump’s January inauguration might deliver market disruptions, he added.