China stocks subdued as tech shares rise, banks and insurers dip
HONG KONG: Chinese stocks were little changed on Monday as bank and insurer shares fell on Beijing’s capital-injection plan, while technology stocks gained. Broader markets were muted as investors watched developments in China-US relations. At the midday break, the Shanghai Composite index was down 0.2% at 3,920.70 points, while the blue-chip CSI300 index was up 0.2%. Tech sectors climbed as…
Chinese stocks remained relatively stable on Monday as bank and insurer shares declined due to Beijing's capital-injection plan. Meanwhile, technology stocks experienced an increase. The broader market remained subdued as investors monitored developments in China-US relations. At the midday point, the Shanghai Composite index dropped 0.2% to 3,920.70 points, whereas the blue-chip CSI300 index rose by 0.2%.
Tech sectors saw a rise as firms related to chips followed US counterparts upwards. The start-up board ChiNext Composite index saw a 2.6% increase, as did Shanghai's tech-focused STAR50 index, which rose by 1.6%. The chip sector surged 2.6%, while the CSI 5G Communication Index climbed nearly 5%, with Zhongji Innolight experiencing an 8.1% rise.
However, the insurance sector declined by 2.5%, and the banking sector lost 1.5%, following China's finance ministry announcing a combined $54 billion in capital injections into state-owned insurers and banks as part of a joint effort to strengthen the nation's financial system. President Xi Jinping is assembling a significant business delegation to join him on his visit to Washington, according to Reuters.
This is an uncommon move given the US's skepticism towards Chinese investment and China's tense relations with private enterprise. Analysts from Nanhua Futures noted that markets are likely to stay within a range as external uncertainties have not yet fully dissipated. Furthermore, shifts in expectations for US interest rates will play a significant role in market direction this week, while defensive large-cap stocks are expected to remain relatively stable.
In Hong Kong, both the Hang Seng Index and the Hang Seng Tech Index lost about 1% each. On a regional level, Asian shares rose on Monday, driven by a strong US jobs report perceived as favorable for global growth, while oil saw a slight increase following the US and Iran targeting ships in the Gulf.
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